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| Mini-budget: What is it and how will it affect me? | Mini-budget: What is it and how will it affect me? |
| (about 1 hour later) | |
| Chancellor Kwasi Kwarteng will later unveil a mini-budget with National Insurance and corporation tax cuts. | Chancellor Kwasi Kwarteng will later unveil a mini-budget with National Insurance and corporation tax cuts. |
| Details of cuts to other taxes such as stamp duty may also be announced as the government tries to limit the impact of soaring energy bills on households. | Details of cuts to other taxes such as stamp duty may also be announced as the government tries to limit the impact of soaring energy bills on households. |
| Experts expect it to be the biggest tax-cutting event for 34 years. | Experts expect it to be the biggest tax-cutting event for 34 years. |
| Labour said funding these tax cuts by borrowing would leave people paying more for longer. | Labour said funding these tax cuts by borrowing would leave people paying more for longer. |
| However, the government hopes the tax cuts will boost the economy, increase its revenues and prevent a massive increase in the national debt. | However, the government hopes the tax cuts will boost the economy, increase its revenues and prevent a massive increase in the national debt. |
| What could be in the mini-budget? | What could be in the mini-budget? |
| The government has confirmed it will let people keep more of their earnings by cutting National Insurance (NI). | The government has confirmed it will let people keep more of their earnings by cutting National Insurance (NI). |
| Other measures could include: | Other measures could include: |
| scrapping a planned increase in the amount of tax companies pay on their profits | scrapping a planned increase in the amount of tax companies pay on their profits |
| possible cuts to other taxes, including stamp duty which is paid on house purchases | possible cuts to other taxes, including stamp duty which is paid on house purchases |
| ending the cap on bankers' bonuses | ending the cap on bankers' bonuses |
| tightening the rules around universal credit | tightening the rules around universal credit |
| plans to boost economic growth, such as creating low-tax zones around the UK | plans to boost economic growth, such as creating low-tax zones around the UK |
| The announcements will be made by new Chancellor Kwasi Kwarteng, who is in charge of the public finances. | The announcements will be made by new Chancellor Kwasi Kwarteng, who is in charge of the public finances. |
| The tax-cutting plans under consideration could cost at least £30bn. | The tax-cutting plans under consideration could cost at least £30bn. |
| Will there be a stamp duty cut? | Will there be a stamp duty cut? |
| There is speculation that the government may cut stamp duty, a tax paid when people buy a property in England and Northern Ireland. | There is speculation that the government may cut stamp duty, a tax paid when people buy a property in England and Northern Ireland. |
| No tax is paid on transactions up to £125,000, and from there it rises in bands to a maximum of 12% for the portion over £1.5m. It raises around £12bn for the Treasury. | No tax is paid on transactions up to £125,000, and from there it rises in bands to a maximum of 12% for the portion over £1.5m. It raises around £12bn for the Treasury. |
| The government is thought to be considering a cut, to help first-time buyers and house moves, which would boost economic growth, according to the Times newspaper. | The government is thought to be considering a cut, to help first-time buyers and house moves, which would boost economic growth, according to the Times newspaper. |
| How will National Insurance change? | How will National Insurance change? |
| The government has confirmed it will reverse a recent rise in National Insurance (NI) from 6 November. NI is a tax workers pay on their earnings. | The government has confirmed it will reverse a recent rise in National Insurance (NI) from 6 November. NI is a tax workers pay on their earnings. |
| Since 6 April, workers and employers have paid an extra 1.25p in the pound, to help fund the NHS and social care. | Since 6 April, workers and employers have paid an extra 1.25p in the pound, to help fund the NHS and social care. |
| NI was set to return to its old rate from April 2023 - to be replaced by a new Health and Social Care Levy at a rate of 1.25%. The levy will now not be introduced. | NI was set to return to its old rate from April 2023 - to be replaced by a new Health and Social Care Levy at a rate of 1.25%. The levy will now not be introduced. |
| The NHS will still get the funding it was promised, but government is now expected to borrow the money rather than raise it from tax. | The NHS will still get the funding it was promised, but government is now expected to borrow the money rather than raise it from tax. |
| High earners will benefit most, as they pay the most NI. An NI cut won't help pensioners or those on low income or benefits because they don't pay the tax. | High earners will benefit most, as they pay the most NI. An NI cut won't help pensioners or those on low income or benefits because they don't pay the tax. |
| What is national insurance? | What is national insurance? |
| Which other announcements are expected? | Which other announcements are expected? |
| Corporation tax | Corporation tax |
| This tax is based on the annual profits that a company makes. | This tax is based on the annual profits that a company makes. |
| It was due to increase from 19% to 25% in April 2023, under a plan announced by the previous PM, Boris Johnson. | It was due to increase from 19% to 25% in April 2023, under a plan announced by the previous PM, Boris Johnson. |
| However, Ms Truss is set to cancel the rise. | However, Ms Truss is set to cancel the rise. |
| Does cutting corporation tax always raise more money? | Does cutting corporation tax always raise more money? |
| Green levies | Green levies |
| These charges fund schemes like insulation and renewable energy. | These charges fund schemes like insulation and renewable energy. |
| The prime minister has promised to temporarily scrap the levies, saving households about £150 each. | The prime minister has promised to temporarily scrap the levies, saving households about £150 each. |
| Income tax | Income tax |
| A possible cut to the main tax on people's earnings could also be on the cards. | |
| Right now, people in England, Wales and Northern Ireland pay 20% on any annual earning between £12,571 to £50,270. (Rates in Scotland are different). | Right now, people in England, Wales and Northern Ireland pay 20% on any annual earning between £12,571 to £50,270. (Rates in Scotland are different). |
| Universal credit | Universal credit |
| Mr Kwarteng is expected to announce a welfare shake-up to "get Britain working again". | Mr Kwarteng is expected to announce a welfare shake-up to "get Britain working again". |
| This is set to include changes to the rules for claiming universal credit, a benefit payment paid to working-age people. | |
| Chancellor set to tighten Universal Credit rules | Chancellor set to tighten Universal Credit rules |
| What is universal credit? | What is universal credit? |
| How does the government plan to boost growth? | How does the government plan to boost growth? |
| The government believes its planned tax cuts will help the economy grow more quickly. | |
| It may announce the creation of "special investment zones". Selected locations around the UK would be allowed to relax planning rules and reduce business taxes to encourage investment. | |
| The mini-budget could also see an end to the cap on bankers' bonuses. This was introduced across the EU in 2014 (when the UK was still a member) following the global financial crisis. Under the current rules, a banker's bonus cannot be higher than their annual salary - unless shareholders agree. | The mini-budget could also see an end to the cap on bankers' bonuses. This was introduced across the EU in 2014 (when the UK was still a member) following the global financial crisis. Under the current rules, a banker's bonus cannot be higher than their annual salary - unless shareholders agree. |
| When asked if she would be happy to see bankers getting bigger bonuses, Ms Truss said she wanted to see a growing economy. | When asked if she would be happy to see bankers getting bigger bonuses, Ms Truss said she wanted to see a growing economy. |
| Truss defends plan to boost bankers’ bonuses | Truss defends plan to boost bankers’ bonuses |
| Will Liz Truss's economic plans make us richer? | Will Liz Truss's economic plans make us richer? |
| Can the UK afford to tax less and borrow more? | Can the UK afford to tax less and borrow more? |
| Critics argue immediate tax cuts will require the government to borrow more for years to come. | |
| The money, plus interest, will eventually need to be paid back by taxpayers. | The money, plus interest, will eventually need to be paid back by taxpayers. |
| However, Ms Truss argues faster growth will bring in more money in tax, which will cover the cost of the amount borrowed. | |
| Warning tax cut 'gamble' will push debt too high | |
| Where does the government borrow billions from? | Where does the government borrow billions from? |
| Why is it being called a mini-budget? | Why is it being called a mini-budget? |
| Major decisions about tax and spending are normally made twice a year - in an autumn Budget Statement and a Spring Statement. | Major decisions about tax and spending are normally made twice a year - in an autumn Budget Statement and a Spring Statement. |
| The Office for Budget Responsibility (OBR) - which gives independent advice to the government - normally publishes its own analysis of these statements. It sets out the cost of new policies, how much tax will be raised and what it means for the economy. | The Office for Budget Responsibility (OBR) - which gives independent advice to the government - normally publishes its own analysis of these statements. It sets out the cost of new policies, how much tax will be raised and what it means for the economy. |
| However, the government is refusing to publish the OBR's assessment alongside the mini-budget. | However, the government is refusing to publish the OBR's assessment alongside the mini-budget. |
| The Treasury said it "remain[s] committed to maintaining the usual two forecasts in this fiscal year, as is required". | The Treasury said it "remain[s] committed to maintaining the usual two forecasts in this fiscal year, as is required". |
| An update on the timetable for the next OBR forecast will come during Friday's statement. | An update on the timetable for the next OBR forecast will come during Friday's statement. |
| A full-scale Budget is expected later this year, but no date has been set. | A full-scale Budget is expected later this year, but no date has been set. |
| Treasury refuses to publish UK economic forecast | Treasury refuses to publish UK economic forecast |
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