The new Chancellor appointed last Friday, Mr Jeremy Hunt announced today that the Government will reverse “almost all” of the tax cuts announced in last month’s mini-budget that have not been legislated for so far. The mini-Budget had 45Bn pounds of unfunded tax cuts that sparked a reaction from the financial markets sending the Sterling pound to a record low. Please see key points mentioned in his announcement this morning:
Remaining the same:
1.25% NIC levies - Mr Hunt announced the reversal of the 1.25% increase in national insurance contributions will continue as planned.
Stamp duty changes – the cut in Stamp Duty in England & Northern Ireland announced in the mini-Budget will proceed as planned. First-time buyers will not pay any Stamp Duty up to £425,000 (up from £300,000) and the value of the property on which first time buyers can claim relief has been increased from £500,000 to £625,000.
Energy cap until April 2023 - The help on energy bills was due to apply universally to every household for two years but Mr Hunt said it will now last in its current form only until April next year.
Reversal of Mini-Budget announced today:
Dividend tax cuts - Mr Hunt announced they will no longer be proceeding with the cuts to dividend tax rates scheduled for April 2023.
IR35 rules being abolished - Jeremy Hunt has today scrapped plans to abolish the IR35 rules.
VAT free shopping - The new VAT-free shopping scheme for non-UK visitors will also be scrapped.
Freeze on Alcohol duty rates - the announcement to freeze rates has been scrapped
Income Tax basic rate will remain at 20% – The cut by 1% will not proceed as scheduled for April 2023. Mr Hunt announced the basic rate of income tax will remain at 20% until economic circumstances allow it to be cut.
The Chancellor announced that the Govt will be tightening up public spending as some areas of spending will need to be cut. He also said that he is committed to delivering economic growth but said “growth requires confidence and stability, and the United Kingdom will always pay its way”.