Chancellor of the Exchequer, Kwasi Kwarteng, announced a U-turn on the Government's plan to abolish the 45p top rate of income tax on Monday (3 October).
The announcement comes less than two weeks after the Chancellor's tax-cutting mini-budget on 23 September.
During the financial statement, Kwarteng said that top earners earning over £150,000 would instead pay the higher income tax rate of 40p.
Around 660,000 top earners would benefit from scrapping the additional tax rate, saving an average of £10,000 a year each.
These plans were met with widespread criticism in light of the ongoing cost of living crisis, and the value of the pound plummeted, hitting an all-time-low of $1.03 on 26 September.
The Government planned to increase borrowing to pay for the tax cuts, but the Bank of England (BoE) was forced to buy Government bonds in a bid to protect the economy.
In his statement on Monday, Kwarteng said:
"It is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.
As a result, I'm announcing we are not proceeding with the abolition of the 45p tax rate. We get it, and we have listened."
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