Mini Budget 2022: All the money saving measures Kwasi Kwarteng is set to announce THIS Friday for millions of Brits
HOUSEHOLDS across Britain are bracing for a tough winter as the cost of living crisis continues to wreak havoc on family finances.
But in just two days the government will finally step in with a mini budget they say should provide crucial relief for hard-up Brits facing sky high bills.
The “fiscal event” is designed to keep more money out of government coffers and in working people’s pockets.
The government claims it should stimulate economic growth and act as a force against sky rocketing inflation.
Liz Truss is desperate to make her mark as a tax slashing PM.
Yesterday she even vowed to unleash a tax cutting revolution, overhauling the system to lower the burden on Brits.
Meanwhile, the Chancellor has been under pressure to act on the cost of living crisis from the moment he was given the keys to No11.
Read our Mini Budget 2022 live blog for the latest cost of living crisis updates...
The government claims it understands the pressure families face.
They say Friday’s mini budget, which takes place in the Commons, will provide much needed relief on household finances.
Here are some of the announcements you can expect.
HEALTH AND SOCIAL CARE LEVY
The Chancellor is expected to slash the Health and Social Care Levy that was brought in under Boris Johnson’s administration last April.
During the Tory leadership campaign Ms Truss said she hated the national insurance hike and vowed to get rid of it.
For some people it means paying the government hundreds of pounds extra a year.
On Friday it’s set to be scrapped.
Critics say it will disproportionately benefit richer workers because they earn more and so will save more.
Here is a breakdown of how much you will save from the reversal:
- A worker on £25,000 will save £155 a year
- A worker on £40,000 will save £343 a year
- A worker on £100,000 will save £1,093 a year
Anyone who earns less than £12,570 a year will continue not to pay any National Insurance at all.
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COST OF LIVING HANDOUTS
Brits will also still continue to receive the cost of living payments announced last spring.
The spring package included a one-off £650 cash handout to benefits claimants, a £300 lump sum to the poorest pensioners and a £150 bung for the disabled.
And an energy bills rebate for all households was also doubled to £40.
It came on top of a £150 council tax rebate for homes in bands A to D announced earlier in the year.
STAMP DUTY
Last night The Times reported that Ms Truss has been working secretly on plans to axe stamp duty.
Cutting the levy will encourage growth by allowing more people to move property and getting more first-time buyers on the housing ladder.
Whitehall sources said the move was “rabbit” out of the hat in the growth plan, reported.
Under the current system no stamp duty is paid on the first £125,000 of any property purchase. The threshold at which the duty is paid for first-time buyers is £300,000.
How much buyers pay depends on the price and type of property, including if it's or .
INCOME TAX
Mr Kwarteng is expected to announce that the basic rate of income tax will be slashed from 20p to 19p.
The PM wanted to make the cut in 2024, but Whitehall sources think it will be sooner.
The exact date the cut kicks in isn’t yet known but should be confirmed on Friday.
CORPORATION TAX
A planned rise in corporation tax for April next year is likely to be binned on Friday.
The idea is that by keeping taxes lower, major companies will have more money to invest in the British economy, ultimately helping it to grow.
The levy on business' profits was due to rise from 19 per cent to 25 per cent.
Reducing costs on businesses should mean shoppers pay less for products - in a win for consumers.
But the overall benefit will be impossible to calculate for now.
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RED TAPE BONFIRE
The new Chancellor is preparing to shred masses of EU red tape strangling City firms - but could ask them to invest in social care in return.
He is set to unveil his "Big Bang 2.0" deregulation blitz in a speech to bosses.
As part of the red tape bonfire he is expected to allow fat cats to trouser millions by scrapping the cap on bonuses they can receive on top of their salaries.
He is also set to ditch Brussels' Solvency II rules that limit insurance firms' investments in exchange for them pouring money into the cash-starved social care system.
Mr Kwarteng is eyeing a trade-off whereby companies plug the £13billion black hole in the creaking care budget after Ms Truss reverses the National Insurance rise.
It would mean Brits don't lose out on the government's social care cap even after the National Insurance rise is reversed.
ENERGY BILLS
The tax cuts will come on top of the energy package announced earlier this month.
The PM confirmed a multi-billion package to save typical Brits £1,000 by protecting them from crippling global gas costs.
Bills were set to rise to £3,500 in October and more than £6,000 next April in a terrifying prospect for most households.
However in a mammoth intervention - which could cost more than furlough - Ms Truss is now going to cap costs from October 1, with the typical family paying no more than £2,500.
She has capped unit prices - meaning you will still pay more for using more - but officials have calculated estimates for how much the plan will save you:
Detached house:
Under October price cap: £4,700
Under new cap: £3,300
Savings: £1,400
Semi detached
Under October price cap: £3,800
Under new cap: £2,650
Savings: £1,150
Mid terraced
Under October price cap: £3,300
Under new cap: £2,350
Savings: £950
Bungalow
Under October price cap: £3,500
Under new cap: £2,450
Savings: £1,050
Flat
Under October price cap: £2,450
Under new cap: £1,750
For businesses and third sector organisations, wholesale non-domestic energy costs will be capped at £211 per MWh for electricity and £75 per MWh for gas.
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cap will come into place for an initial six months, beginning October 1 this year and ending on 31 March 2023.
The Government Energy Bill Relief Scheme will ensure firms are only paying "less than half the wholesale prices anticipated this winter".