New Chancellor Reverses More Tax Cuts From Mini-Budget
In his first speech as the new Chancellor, Jeremy Hunt, reversed almost all the tax cuts announced by his predecessor in the Mini-Budget three weeks ago. This follows on from the announcement on Friday that the Corporation Tax rise would go ahead as planned, increasing to 25% from 1 April 2023.
As part of today’s announcement, the following measures have also been scrapped:
- Cutting the Basic Rate of Income Tax to 19p – instead it will remain at 20% ‘indefinitely’
- Dividend tax cut to be abolished
- IR35 reforms will no longer go ahead
- Energy Price Guarantee will only last until April 2023 and will be reviewed after that
- VAT-free shopping for non-UK visitors has been cancelled
- Alcohol duty freeze will no longer go ahead
This means that the only things that remain in place from the Mini-Budget are the cut to Stamp Duty in England & Wales and the reversal of the National Insurance contributions increase by 1.25% in April (applies to the whole of the UK).
David Morrison, Partner & Head of EQ Taxation, commented, “We’ve all seen the economic impact in recent weeks and these further changes, although aimed to help with stability, will still cause concern in the business community. We hope this will be the last turnaround in policy to allow businesses to make measured, long term decisions and we wait to see what further measures will be announced on 31 October as part of the UK Governments Medium-Term Fiscal Plan. Additionally, what will the Scottish Government reveal as part of their Scottish Budget, traditionally delivered shortly after the UK Budget.”
As always, our EQ Taxperts will provide further details as and when we have them. Should you wish to discuss your own circumstances, please get in touch with your usual EQ contact or call one of our offices.