New Chancellor Jeremy Hunt makes serious revisions to the mini budget

What might it mean for you and your business?

The government will reverse "almost all" tax measures announced as part of its mini budget. Plans to cut the basic rate of income tax to 19% have been shelved and support for energy bills scaled back, announced Jeremy Hunt this morning. This article will outline the changes in economic policy, what is staying, what is changing and what has been cancelled.

Income tax

What was announced

• Cut in basic rate of income tax to 19% from April 2023
• Currently, people in England, Wales and Northern Ireland pay 20% on any annual earning between £12,571 to £50,270 – rates in Scotland are different
• A 45% higher rate of income tax abolished for England, Wales and Northern Ireland taxpayers
• One single higher rate of income tax of 40% from April next year

What has changed

• The basic rate of income tax will remain at 20%. The cut in the basic rate has been put on hold “indefinitely”
• The government had already U turned on the higher rate change which is no longer going ahead. A 45% higher rate of income tax will remain

Corporation tax

What was announced

• Cancel UK wide rise in corporation tax which was due to increase from 19% to 25% in April 2023

What has changed

• UK corporation tax will go up from 19% to 25% in April 2023

Energy bills

What was announced

• Support for households facing rising energy costs was announced by the prime minister before the mini budget

What has changed

• This is now being scaled back. The energy price guarantee which was meant to last for two years will be in place until April 2023
• A Treasury led review will look at what measures should be put in place after this date

What measures are staying?

Measures announced in the mini budget that have not been cancelled include:

• National Insurance - the cut to National Insurance stays and the 1.25% rise in National Insurance will still be cancelled on 6 November

• Stamp duty - the changes to stamp duty remain
• Universal Credit - rules around tightening benefit rules remain
• Bankers' bonuses - lifting cap on bankers' bonuses stays

What else has been cancelled?

Other measures that have been cancelled include:

• Simplifying IR35 rules - these rules which govern off payroll working
• VAT free shopping for overseas visitors
• A freeze on alcohol duty
• Cuts to the tax paid on dividends - the increase introduced in April will now stay in place

If you have any questions about what these changes may mean for you or your business, please get in touch with your Swindells’ partner who will be able to advise you further.