Chancellor makes emergency statement on mini-budget

Date: 19/10/22

Chancellor makes emergency statement on mini-budget

The newly appointed Chancellor, Jeremy Hunt, has announced a reversal of almost all of the tax measures announced in ex-chancellor, Kwasi Kwarteng’s, 23 September mini-budget that had not yet been legislated. The reversal comes in a bid to settle the economic instability and restore public confidence.

The Chancellor’s announcements include that:

  •  the basic rate of income tax will remain at 20% indefinitely;

  • the 1.25 percentage point increase in dividends tax which took effect in April 2022 will remain in place;

  • the 2017 and 2021 reforms to the off-payroll working rules (IR35) for the public and private sector will remain in place;

  • the proposed VAT-free shopping scheme for non-UK visitors to Great Britain will not go ahead; and

  • the proposed freeze in alcohol duty rates for a year will not go ahead.

As previously reported it had already been decided not to proceed with the proposals to both remove the 45% additional rate of income tax and to cancel the planned increase in the corporation tax rate.

The measures still going ahead include:

  • the reversal of NIC increases and cancellation of Health and Social Care Levy;

  • the cuts to Stamp Duty Land Tax; and

  • the permanent setting of the annual investment allowance (AIA) threshold to £1m.

James Cornthwaite FCA CTA

Author: James Cornthwaite FCA CTA

A former pupil at St Aidan’s C of E High School, James attended Blackpool Sixth Form College and Lancaster University, graduating in 2004, gaining BSc. first class honours. He joined Moore and Smalley, Preston in 2005 and qualified as a...

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