Chancellor abandons plan to abolish 45p tax rate

The government has abandoned its plan to remove the additional rate of income tax. Chancellor of the exchequer Kwasi Kwarteng defended the change in policy saying the proposed abolition of the 45p tax rate had become a ‘distraction’ from the government’s plans to achieve higher growth.

Jamie Morrison head of tax at HW Fisher said: ‘It was a bold move by the chancellor to cut the top rate of income tax in his mini-budget – and one that has not paid off. Tackling the UK’s cost of living crisis should be the government’s top priority and it was hard to see how the abolition of the 45p tax rate would have benefited anyone apart from the UK’s highest earners.’