London, Nov 23 UK Chancellor Jeremy Hunt has announced a package of tax cuts for businesses and workers, designed to boost the country's economic growth.
"Our choice is not big government, high spending and high tax because we know that leads to less growth, not more. Instead, we reduce debt, cut taxes and reward work," Xinhua news agency quoted Hunt as saying in the House of Commons in his Autumn Statement 2023 on Wednesday.
To reward hard work, the chancellor said he will cut the main rate of National Insurance from 12 per cent to 10 per cent from January 2024, affecting 27 million British workers.
Taxes will also be cut and simplified for two million self-employed people.
Taken together, this tax cut package is worth over 9 billion pounds ($11.2 billion) per year.
It is the largest ever cut to employees and the self-employed.
The independent Office for Budget Responsibility (OBR) estimated these reductions will lead to an additional 28,000 people entering work, according to a statement from the Treasury.
The Treasury promised that "cutting National Insurance will not lead to any change in the National Health Service funding or pension payments.
Services will remain unchanged and continue to be funded as they are now."
The legal minimum wage, known as the National Living Wage, will increase by nearly 10 per cent from 10.42 pounds to 11.44 pounds per hour from April 2024.
For businesses in the UK, the Chancellor announced the "Full Expensing: Invest for Less" permanent tax cut, a measure that helps businesses to offset their investment in information technology equipment, plants and machinery against tax.
"This means that for every million pounds a company invests, they get 250,000 pounds off their tax bill in the very same year," Hunt said, noting that this costs 11 billion pounds a year and it is "the largest business tax cut in modern British history".
Hunt also announced that the country's state pension will increase by 8.5 per cent in April 2024, and Universal Credit and other working age benefits will also be boosted by 6.7 per cent in April, in line with September's inflation figure.
According to the OBR, the UK economy is expected to grow by 0.6 per cent this year and 0.7 percent in 2024, rising to 1.4 per cent in 2025.
The OBR forecast headline inflation to fall to 2.8 per cent by the end of 2024, before reaching the 2 per cent target set by the Bank of England for 2025.
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