The world of tax can be an ever-changing landscape, but I don’t think anyone could have expected the rate at which announcements have come our way over the last couple of weeks.
On 23 September, Liz Truss’s new Chancellor Kwasi Kwarteng delivered his ‘mini-budget’, backing up the many pledges Truss made to become leader of the Conservative party, mainly focusing on tax cuts and help with energy bills.
Fast forward just over three weeks and we now have a new Chancellor in place in the form of Jeremy Hunt – and nearly all of Kwarteng’s announcements reversed.
In order to ‘stabilise’ markets, Hunt received special permission from the Speaker of the House to release a statement earlier this morning as he added to Friday’s reverse of the reverse in Corporation Tax rates, which will see the rise to 25% from April 2023 onwards continue.
In his brief speech to the market, press and public, which will be backed up by a further statement to the House later today, Hunt went on to announce:
- Income tax rates will no longer drop to 19% from the current 20% from April 2023. This is an indefinite reversal which will be reviewed once the markets stabilise
- The dividend tax rate increase of 1.25% from April 2023 will now go ahead
- Measures to simplify the IR35 legislation which govern off-payroll working will no longer take place
- VAT free shopping for overseas visitors has been scrapped
- The freeze on Alcohol duty rises has also been scrapped.
Due to the status in parliament, and the fact that they have nearly already been legislated for, the scrapping of the Health & Social Care Levy from 6 November will still take place, reducing the National Insurance rates by 1.25%.
The Stamp Duty Land Tax 0% band uplift also keeps its place and as a reminder, this raises the 0% to £250,000, and for first time buyers the rate rises to £425,000.
And finally (for now?), Hunt announced that the Energy Price cap, which would see an average household’s energy bill set at around £2,500, will only be in place until April 2023, rather than the two years previously announced for domestic customers. The Chancellor explained that a ‘Treasury led review’ will take place to make further help from April 2023 more targeted at those households and businesses that need it the most.
Take a look at our helpful infographic, which highlights the key measures initially introduced by Kwasi Kwarteng that have now been scrapped and those that are still going ahead.
Should you need any advice following the announcements, our Tax team is happy to help. Simply get in touch with your usual BHP contact, call 0333 123 7171 or email info@bhp.co.uk.
