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.