Following on from the previously announced U-turns on Corporation Tax and the top rate of income tax, new Chancellor Jeremy Hunt has today announced plans to scrap ‘almost all’ the tax cuts announced in the ‘mini-Budget’ on 23 September.
The Chancellor has also scaled back the energy bills support scheme which will now end in April 2023 rather than being in place for two years as previously announced.
Measures scrapped:
- Cutting the basic rate of income tax to 19% from April 2023. The basic rate of income tax will remain at 20% indefinitely.
- Cutting dividends tax by 1.25% from April 2023. The 1.25% dividend increase introduced from April 2022 will now remain.
- The reversal of the off-payroll working rules (also known as IR35). The reforms will now remain in place.
- Introduction of a new VAT-free shopping scheme for non-UK visitors.
- Freezing alcohol duty rates from 1 February 2023 for 12 months.
U-turns already announced:
- Corporation Tax will increase from 19% to 25% in April 2023 as originally planned
- The 45% tax rate will remain in place.
Measures kept:
- The reversal of the 1.25% increase to National Insurance from 6 November 2022
- The increase of the Stamp Duty Land Tax threshold and extension of the first time buyers SDLT regime
- The £1 million Annual Investment Allowance will remain the permanent level for this allowance
- The Seed Enterprise Investment Scheme and the Company Share Options Plan changes will go ahead.