What changes will the UK tax calculator 2022 undergo after the election of a new prime minister?
What were Liz Truss’ promises about taxes?
What were Rishi Sunak’s promises about taxes?
What are the solutions of the conservative candidates to strengthen the UK economy?
What will the UK tax calculator 2022 look like after the election of the new UK Prime Minister? The key figures of the conservative ruling party are competing for the seat of UK Prime Minister. At the same time, the economic crisis, unprecedented inflation, the risk of economic stagnation, and public dissatisfaction with the rampant increase in the cost of living due to the high level of government debt are their main challenges. The UK tax calculator 2022 will have many changes after the election of the new Prime Minister.
Conservative solutions to strengthen the UK economy
The UK tax calculator 2022 will change the election of a new Conservative leader. The solutions offered by the Conservative Party leadership candidates in the past few days have been mainly based on lowering taxes and raising the minimum wage for workers. Liz Truss, the British Foreign Secretary and one of the leading options in the elections, wrote in a note to the Telegraph that since the first day of the formation of the government, the taxes increased by Boris Johnson’s government have been reduced. She further wrote that raising taxes is not a good policy in the current situation and will reverse the decision of Boris Johnson’s government last April.
Increase in UK government debt
The UK tax calculator 2022 is about to change as the UK has had its most significant debt since World War II. Meanwhile, the obligation of the UK government has reached the highest level since the Second World War due to the consequences of Brexit, the Covid-19 epidemic and the new conditions caused by the war in Ukraine. The total debt of the UK government has reached a staggering figure of £2,382.8 billion, equivalent to 104.5% of the country’s GDP, which has not been seen since the 60s. Therefore, the UK tax calculator 2022 will not change the economic situation of the British people.
Rising inflation and the cost of living in the UK
The UK Tax Calculator 2022 is changing in a context where the cost of living has risen sharply. At the same time, the unprecedented jump in the inflation index and the rampant increase in the cost of living in the UK has put the island in the worst economic conditions of the last half-century. According to the latest report of the Office for National Statistics (ONS), the inflation rate in the UK reached 10.1% last month (May), the highest figure in the previous 40 years. Before the Ukraine war, ONS predicted that the inflation rate would be 2% despite the pressures caused by Brexit and the Covid-19 crisis. But now economists predict that the inflation rate will reach over 11% by the end of this year due to the increase in energy prices.
Rishi Sunak’s promise to reduce taxes
Rishi Sunak, the former UK Chancellor of the Exchequer, who was the principal architect of the tax hikes in the Johnson government, has announced in an apparent backlash that he will cut taxes again if he wins the election. But that tax reduction can improve the economic situation of the UK is not a correct statement. Sunak has been reluctant to cut taxes too much but has promised to cut business rates in 2023, followed by personal tax cuts.
Sunak has also promised to cut income tax from 20p to 19p in 2024 and to 16p by the end of the next parliament. Although this policy is considered an excellent lever to win votes in the elections, it will not cure the country’s economic problem, which is rapidly moving towards economic stagnation. Food and energy prices have reached such a level in the UK that many people are trying to skip meals, borrow money or go out less to make ends meet.
Liz Truss’s tax promise
Although all European countries are in economic crisis and inflation has increased in an unbridled manner, statistics and surveys show that the UK is in the worst situation compared to all member countries of the Organization for Economic Co-operation and Development (OECD). Truss is optimistic and has pledged to “start cutting taxes from day one”. This includes scrapping the rise in national insurance and the planned rise in corporation tax next year. She has also said he will scrap tariffs on green energy and introduce “full free ports” to help businesses. Truss insists his tax cut plans, which include reversing recent increases in National Insurance and scrapping the rise in corporation tax, are cost-effective and will reduce inflation.
Rishi Sunak’s criticism of Liz Truss’s economic policies
The former chancellor says that the opponent’s economic policies risk increasing inflation and interest rates. Rishi Sunak has launched his most potent attack yet on the economic policies of his rival Liz Truss, claiming her £30bn plans for unfunded tax cuts will fuel inflation and drive up interest rates. His attack came as a new poll of Conservative Party members showed Truss in the lead in the race to become prime minister. Taxes and the cost of living have become a significant battleground in this tight race, with Sunak insisting that immediate tax cuts, as promised by the Truss, risk exacerbating the cost-of-living crisis.
Inflationary economic programs of Liz Truss
A poll of Tory members by YouGov put Truss ahead by 62% to 38%. Sunak has repeatedly presented himself as a candidate willing to have an extensive conversation about the economy instead of telling what he has dismissed as myths. “Yes, I think it would be inflation,” Sunak said when asked about the impact of Truss’s tax cut plans. With inflation now at a 40-year high, he told LBC: “In that situation, my strong point of view is – if the government goes on a huge borrowing spree, that is only going to make the situation worse.”
Boris Johnson’s government raised taxes in the 2022 budget bill presented to parliament last April, in a move that sparked widespread protests at home. With this decision, the popularity of the conservative party in the polls decreased drastically. It was the beginning of a series of changes that finally led to the prime minister’s resignation. But it seems that the Conservative Party these days has returned to its usual cycle of lowering taxes and then raising them after the government is installed. The party’s leadership candidates are trying to win more votes by promising to cut taxes and raise the minimum wage.