Remember just a few weeks ago on 23rd September when there was a Mini Budget delivered by Kwasi Kwarteng? Well, now almost all of his changes have been reversed by the new-new Chancellor of the Exchequer, Jeremy Hunt.
Confused? We’re not surprised! The Economics Editor at BBC News has called it “an utterly extraordinary un-Budget, perhaps marking the biggest U-turn in British economic history.” His description refers to the enormous change to the original plan, as around £32bn of the previously announced £45bn of unfunded tax cuts have been scrapped just 24 days later.
To help you keep track of what’s what in terms of tax, financial support and other economic systems being put in place (or removed) by the Government, here are the latest updates in a digestible format:
Being scrapped
- The 1p cut to the basic rate of income tax has been put on hold indefinitely, so the rate will remain at 20% until further notice.
- The energy price guarantee was meant to last for two years but will now only be around for six months. It will then be reviewed in April 2023.
- The dividend tax cut will be abolished.
- The plans for VAT-free shopping, an alcohol duty freeze and the 2021 reforms have been cancelled.
- The corporation tax rate (the tax that companies pay on their profits) will go up from 19% to 25% in April 2023 after all. However, this only applies to companies with over £50,000 of profit, plus those with over £50,000 of profit will pay more corporation tax on a sliding scale (ask us for more details).
Staying in place
- No stamp duty is now paid on the first £250,000 of a property's value for all buyers in England and Northern Ireland. For first-time buyers, the threshold is £425,000.
- National Insurance contributions increased by 1.25% in April but this is still being reversed in November 2022.
- The £400 discount on energy bills is still being paid to consumers over winter, which are administered through your energy supplier and don’t need to be paid back. The discount is broken down into instalments of £66 in October and November, increasing to £67 per month from December until March 2023.
Ask us for tax advice
If you’d like to have a chat about what these changes could mean for your business or your personal tax liabilities, as well as access tailored advice on how to reduce your tax bills, please call our Yorkshire office on 01482 235575, our London office on 0207 885 0605, or fill in our contact form.
