Chancellor Kwasi Kwarteng today outlined his details pertaining to the mini budget, in a desperate bid from the government to ease the growing burden of the cost-of-living crisis. Kwarteng announced the removal of the health and social care levy, in addition to a reversal of the national insurance hike, which could save over 28 million people around £300 a year. For business owners, corporation tax will remain at 19% – which could pump a further £19 billion back into the economy. This comes as prime minister Liz Truss and her newly elected cabinet begin embarking on their promise to boost the UK’s economic growth amidst soaring prices.

In light of this, Tommy Mcnally, leading tax expert and CEO of Tommys Tax, explains what this means for employees and business owners across the nation, and why Brits should be more educated in this area in order to maximise on their tax savings.

Today’s announcement of the reversal of April’s national insurance tax increase will likely come into effect as of November, with Kwarteng also announcing a 5% cut in the additional rate of income tax, bringing this number to 40%. However, this will only be applicable to those with an income of over £150,000, and calls for greater action to assist Brits struggling to keep up with the current economic conditions.

Whilst the prime minister’s plans to review the current tax system aims to boost Britain’s economy, it has also prompted some criticism after reports show that a cut in national insurance would benefit the highest earners 250 times more than the poorest. That being said, a potential decrease in national insurance alongside a raise in personal allowance could still prove to be a vital lifeline for millions of households across the country struggling to make ends meet. The government’s overhaul on economic reforms will likely have a trickle-down effect on the economy, with a focus on “growing the size of the pie so everyone gets a bigger slice”.

Tommy Mcnally, leading tax expert of Tommys Tax, explains that employers and employees across the UK should take this opportunity to become more educated in this area to ensure that they are more prepared when it comes to tax returns. With around £20 billion of tax left unclaimed every year, this marks a crucial period for Brits navigating a loss in capital across all domains.

Tommy Mcnally, leading tax expert and CEO of Tommys Tax, comments:

“In the current climate, today’s mini-budget could act as a lifeline for struggling households across the country. More importantly – with such a large economic overhaul the government is planning to put into action – it marks a crucial time for people to become more educated in this space. We will likely only see some form immediate relief in the short-run, especially because Truss is focused on growing the economy as a whole – meaning that we’ll likely see plans for a desired trickle-down effect. That being said, people must ensure that they are aware of the current tax regulations so that they are aware of the correct amounts they should be paying.

“For the majority of people, taxes can be boring, confusing and anxiety-inducing, which is why millions of tax rebates are left unclaimed. Knowing what you can and can’t claim for isn’t easy to understand, however with our service, it becomes so simple and allows people to claim what’s rightfully theirs. With nearly everyone impacted by the increase of cost of living across the board, there are ways in which people can inject a much needed-boost into their bank accounts.”