Emergency budget with tax codes 2022-2023
Dawn of a new era?
In his first Budget speech as Chancellor, Kwasi Kwarteng said that ‘we need a new approach for a new era, focused on growth’. He would build this
around three priorities: reforming the supply side of the economy, maintaining a responsible approach to public finances, and cutting taxes to
boost growth. What followed certainly delivered on the third of these: this package has been described as the biggest tax cutting budget for half
a century, following on from the earlier announcement of very substantial support for individuals and businesses coping with rising energy prices.
The Chancellor also put forward a number of proposals to reduce costs and regulation for businesses, moving the levers of tax and legislation to
encourage investment, employment and economic growth. It remains to be seen whether the UK’s productivity and national income will respond
in line with his aspirational target of 2.5% a year.
The other priority, fiscal responsibility, was covered in less depth. The response of the financial markets to the announcement of such substantial
tax cuts was immediate: the value of the pound and the main stock market index both fell. The Chancellor put off the publication of plans to
reduce government debt over the medium term, and full economic and fiscal forecasts, until later in the year.
The government is taking big but potentially risky steps to promote growth. This document describes the main measures that were announced,
as well as some things that might have been announced but were left unsaid, and explains the context. If you would like to discuss what it all
means for you and your finances, we will be happy to help.