Nearly a quarter of million more Britishers might find themselves subjected to pay the high rate of income taxation as per the new plans unveiled by the UK PM Rishi Sunak and Jeremy Hunt.
A report by Moore Kingston Smith for the Times stated that nearly 246,000 people will be forced to pay the top rate of tax.
Many expect that the new prime minister and the chancellor will reportedly reduce the 45p income tax rate threshold from £150,000 ($177,600) to £125,000 ($148,000). This is expected to be announced during the Autumn Statement, the Telegraph reported.
With this new plan, the government aims to collect approximately £1.3 billion ($14.9 million) annually, as it makes efforts to close a fiscal gap estimated at £60 billion through increasing taxes and reducing spending.
The plan will cost £580 ($686.7) per year for the individuals. Currently, over 600,000 people who are already paying the tax will now see their bills increased to £1,250 ($1,480) per year.
The public sector wages are expected to be limited to 2 per cent, and many professions such as nurses, and police will see a decline in their income.
The prime minister said that he is open to tax cuts in the long run, but he has ruled out short-term tax cuts. The chancellor said that in order to achieve long-term sustainable growth, the country needs to control inflation and create financial stability. He said, “There is no other way.”
Earlier, during Truss’s administration, ousted chancellor Kwasi Kwarteng during the September mini-budget declared that the 45p top rate of tax will be eliminated completely. However, after receiving criticism from Tory MPs and the country’s currency hitting a historic low, he changed the idea after three weeks.
(With inputs from agencies)
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