Britain’s corporation tax will rise to 25% this April, the Daily Telegraph reported on Friday, in a second humiliating government u-turn on economic policy and amid a report that finance minister Kwasi Kwarteng is set to be sacked.
The rise to the tax scraps Kwarteng’s plan to freeze it at 19%, announced in his Sept. 23 “mini-budget” plan, an economic plan which now appears to be falling apart.
Prime Minister Liz Truss is due to hold a press conference at 1300 GMT. The Times newspaper has reported that she is set to u-turn on the mini-budget and sack Kwarteng.
UK foreign minister fails to reaffirm corporation tax plan
Earlier in October, Kwarteng’s cut to the highest rate of income tax was reversed.
His growth plan was funded by vast government borrowing and was aimed at snapping the economy out of years of stagnant growth but instead has caused weeks of turmoil, and forced the Bank of England to intervene to stabilise markets.
Abandoning the corporation tax freeze will boost the public finances by almost 19 billion pounds ($21 billion).
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