New Chancellor reverses mini budget

The new Chancellor, Jeremy Hunt, held an emergency press conference this afternoon (17 October), releasing his statement following on from the mini-budget.

In his statement, the Chancellor revealed his plans to retract almost all of PM Liz Truss's tax cuts announced in the government's mini-budget three weeks ago, reversing almost all tax measures in the growth plan. Mr Hunt also announced that the government will stand by it's energy cost support bill, but that help with bills is now only guaranteed until April 2023.

Mini-Budget measures scrapped:

• Corporation Tax – Cancelling rise from 19% to 25%

What has changed: Ms Truss had already announced that UK corporation tax will go up from 19% to 25% in April 2023 after all

• Income Tax – Removal of 45% top rate for high earners

What has changed: The government had already U-turned on the cut to the higher rate, which is no longer going ahead

• Income Tax – Cutting basic rate by 1p to 19p

What has changed: The basic rate of income tax will remain at 20%. Cutting it has been put on hold "indefinitely"

• Energy bills – Government scheme to support households for two years.

What has changed: Although the energy price guarantee remains, it now only covers this winter. I will be in place until April 2023

• IR35 rules - Plans to change the rules on off-payroll working, meaning companies were no longer responsible for ensuring their contractors were paying the right amount of tax

What has changed: this reform will no longer go ahead

• Shareholders Dividends - Cuts to the tax paid on shareholders' dividends

What has changed: the increase introduced in April will now stay in place

• Alcohol duty – Freezing rates. Planned increases in the duty rates for beer, cider, wine and spirits will now go ahead
   
• VAT – Tax-free shopping for non-UK visitors

Mini-Budget measures retained:

• National Insurance – Reversing 1.25% increase
• Stamp duty – No duty on first £250,000 of property’s value
• First-time buyers – No duty on first £425,000 of property’s value
• Bankers Bonus - Rules which limit bankers' bonuses to twice their fixed salary to be scrapped
• Benefits - Rules around universal credit tightened, by reducing benefits if people don't fulfil job search commitments

Read more in our PDF summary here. 

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