New Chancellor makes emergency statement
The new Chancellor, Jeremy Hunt, has announced that the government will be abandoning nearly all of the tax cuts announced in last month’s mini-Budget.
Key announcements are:
Tax
- A planned 1p cut in income tax will be postponed “indefinitely”.
- Corporation tax will increase from 19% to 25% in April 2023.
- A planned 1.25% cut to dividend tax has been scrapped.
- Changes announced by the previous Chancellor to IR35 tax rules have been axed. Last month in his mini-budget, Kwasi Kwarteng said that from April, workers who are providing their services via an intermediary, such as a personal service company, would once again be responsible for ascertaining their employment status and paying the appropriate amount of tax and National Insurance to the HMRC. This will now remain the responsibility of the hiring business.
Energy support
- The energy price guarantee will only remain universal until April 2023, instead of the two years announced by the previous Chancellor. It will then be limited to certain households.
The following mini-Budget measures introduced by the previous Chancellor will remain:
- A 1.25% cut to National Insurance from November.
- The abolishment of the Health and Social Care levy.
- The cut to Stamp Duty also remains.
Mr Hunt said: “No government can control markets but governments can give certainty about the sustainability of fiscal plans. We will reverse almost all the tax measures in growth plan. At a time when markets are rightly demanding a commitment to sustainable finances it is not right to borrow to fund this.”
For further advice on how the budget could affect you or your business, please email the employment, property or corporate and commercial team at enquiries@bpcollins.co.uk or call 01753 889995.
