Chancellor Jeremy Hunt has this morning, ahead of a full statement to the House of Commons, announced a reversal of almost all the tax measures revealed by his predecessor, Kwasi Kwarteng, in the mini-budget only at the end of September. The new Chancellor has acted in an attempt to bring confidence and stability to the markets following the turmoil of the last couple of weeks.
Whilst the Chancellor acknowledged no government could control the markets he stated they can give certainty about the public finances. So in an attempt to restore stability the majority of the planned changes in the mini-budget have been scrapped.
Following the statement issued by the chancellor this morning the main changes are summarised as follows:
- Income Tax – The planned cut to the basic rate of income tax from 20% to 19% from April 2023 has been scrapped. The basic rate of income tax will now remain at 20% indefinitely until economic circumstances allow for a cut.
- Dividend Tax – The planned cut has been abolished. This means that from 6 April 2023 the dividend tax rates will be a basic rate of 8.75%, an upper rate of 33.75% and an additional rate of 39.35%.
- Corporation Tax – The planned removal of the increase in corporation tax from April 2023 to 25% has been reversed. The corporation tax rate will now increase to 25% with effect from April 2023.
- Off Payroll working – The off payroll working regulations will now remain in place and not revert to the rules previously in place prior to 2017 and 2021.
The only two big changes that remain from the mini-budget at the end of September are the reduction in the National Insurance contributions by 1.25% with effect from 6 November 2022 and the cuts to Stamp Duty Land Tax in England and Northern Ireland.
If you have any questions or require further information regarding how any of the changes outlined above may affect you, please speak to our Tax Director, Jenny Marks.
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