At the Conservative Party conference in Birmingham, the government has confirmed that it is making a U-turn on the proposed 5% income tax reduction for those paying the Additional Rate 45% on Income Tax.
This is an embarrasing start for Liz Truss, Kwasi Kwarteng et al. We had already suggested that income tax cuts were not the right move at present and to tackle inflation, VAT cuts, to bring prices down across the board, as well as additional tax levies on energy companies were the right route.
This will do nothing to deliver confidence in government from the people. It will do nothing to reduce inflation and will do little to help lower earners through the cost of living crisis.
On a positive note, if you are a 45% tax payer, it means you potentially can still get 45% income tax relief on pension contributions.