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The Independent Publishers Guild (IPG) and Publishers Association (PA) have welcomed the government cancelling a planned corporation tax hike but the IPG has said “eye-watering bills” will still present a challenge in the coming months.
On 23rd September, in a ‘mini budget’, chancellor Kwasi Kwarteng unveiled a “growth plan”, which included announcing that a proposed rise in corporation tax – which had been set to rise to 25% next year – has been cancelled, keeping it at 19%.
Under the plan the basic rate of income tax will also be cut to 19% in April 2023, one year earlier than planned, and stamp duty has also been cut.
Kwarteng said: “Economic growth isn’t some academic term with no connection to the real world. It means more jobs, higher pay and more money to fund public services, like schools and the NHS.
“This will not happen overnight, but the tax cuts and reforms I’ve announced today – the biggest package in generations – send a clear signal that growth is our priority.”
Reacting to the announcement, Dan Conway, c.e.o of the PA, welcomed the cancellation of the corporation tax increase and the package of support around energy prices.
He said: “It is crucial that the government brings in measures to support people and businesses across the UK in the challenging months ahead and we note the cancellation of the corporation tax increase and the much-covered package of support around energy prices.
“The publishing industry stands ready to support the government’s commitment to turbocharging growth and seizing global opportunities. While we know we are all facing a challenging economic period, publishing is ready to continue to play its vital economic and cultural role as a cornerstone of the creative industries.”
He added that “maintaining the UK’s world-leading copyright and IP regime will also be a vital part of that and we look to the government to give the industry the vital assurances it needs in this area to stimulate investment and growth”.
“We also remain committed to making the case for VAT to be removed from audiobooks and will continue to ask the government to correct this last tax anomaly in the UK book market,” he said.
Bridget Shine, chief executive of the IPG, agreed that “cuts in income tax are obviously welcome for people who are facing rising costs in many areas of their lives,” adding, “the reversal of increases in national insurance payments and corporation tax will also be of some benefit to businesses.”
However, she said: “Individuals and publishers alike continue to face some eye-watering bills, and whether these measures deliver proper economic growth and genuine help for personal finances very much remains to be seen.”