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Martin Lewis gives good news to anyone earning less than £50,000

Martin Lewis gives good news to anyone earning less than £50,000

The chancellor announced his 'mini' budget this week, which made major changes to the tax system

In case you missed it, the country is on its arse. Inflation is rising, the pound is falling, and millions of people are struggling to make ends meet.

And with winter on the horizon, it's about to get a lot harder for many households who are left with making the choice between eating and heating.

But last week, the newly-appointed Chancellor of the Exchequer Kwasi Kwarteng shared his emergency 'mini-budget', which saw him announce a raft of changes to the country's tax system.

In a statement to the House of Commons, Kwarteng said the government was putting an end to the cap on bonuses available to bankers and was axing the 45 percent top rate of tax for people earning more than £150,000 a year.

Kwasi Kwarteng announced a raft of tax cuts this week.
ZUMA Press, Inc./Alamy Stock Photo

He and Prime Minister Liz Truss have been heavily criticised for seemingly helping the richest in society at a time when the poorest are struggling to survive.

But Martin Lewis did highlight one change that will help those earning £50,000 or less.

As well as getting rid of the top rate of tax, Kwarteng also announced that the government was bringing the basic rate of tax down.

Currently, the first £12,570 of our salaries is not taxed, while everything above that to £50,000 is taxed at 20 percent.

However, under the changes, this will now be taxed at 19 percent.

Discussing the change, the Money Saving Expert said: "For anyone earning £50,000 and over, you don't really get any more gain.

"The gain is really on the income between £12,570 and £50,000."

Obviously, those earning over £50,000 will still benefit from the reduction to the basic rate, however, they will still have to pay 40 percent on earnings above that.

Martin Lewis highlighted a saving for people earning less than £50,000.
ZUMA Press Inc/Alamy Stock Photo

Elsewhere in his budget, Kwarteng announced that the increase in Corporation Tax proposed by the previous government under Chancellor Rishi Sunak would be cancelled, meaning that the current rate of 19 percent would remain.

According to a document on the Treasury's website, the chancellor's new plans would cost a staggering £161 billion over the next five years.

It states that it will cost the country £19.2bn in the current fiscal year – which includes cost of living support announced back in May – and £26.7 billion, £31.3bn, £39.4nn and £44.8bn over the next four.

Kwarteng also stated that there would be immediate cuts to Stamp Duty, which is paid when someone buys a property.

Labour’s Shadow Chancellor Rachel Reeves blasted the 'mini' budget as a 'comprehensive demolition' of the last 12 years of Tory government.

She said: "The costs of the energy price cap will be funded by borrowing, leaving eye watering windfall profits of the energy giant untaxed."

Reeves went on to claim that ‘working people are left to pick up the bill'.

Adding: "It is a budget without figures, a menu without prices. What has the chancellor got to hide?"

Featured Image Credit: Mark Thomas /Quintessence/Alamy Stock Photo

Topics: Martin Lewis, Politics, UK News, Money