Chancellor Jeremy Hunt has announced the government will axe almost all the tax cuts it announced in last month’s mini-budget.
In an emergency statement this morning (17 October), Hunt said: “We will reverse almost all the tax measures announced in the growth plan three weeks ago that have not started parliamentary legislation.”
Income Tax plans scrapped
The chancellor Jeremy Hunt has confirmed the government will scrap plans to reduce the basic rate of income tax from 20% to 19% in April next year, a move that had been forecast would cost the Exchequer almost £5.3 billion in 2023-24.
The lower rate of 20p tax will remain “until economic circumstances allow for it to be cut” says the chancellor.
Energy bill support could be cut after April 2023
Help with energy bills for all households will only last until April, with Jeremy Hunt promising a review to look at a “new approach” to target support at those worst off after that.
The chancellor added that the government’s priority in moving forward is helping those who are “most vulnerable”.
Mr Hunt said measures, including the previously announced freeze on Corporation Tax and keeping the top rate of Income Tax, would raise around £32bn a year.
Cuts to dividend tax rates axed
It has been announced there will no longer be a cut to dividends tax by 1.25 percentage points from April 2023. The 1.25 percentage points increase, which took effect in April 2022, will now remain in place.
What else is being scrapped?
- The reversal of off-payroll working reforms introduced in 2018 and 2021
- VAT-free shopping for non-UK visitors
- The freeze on alcohol duty rates
What is remaining?
Mr Hunt has confirmed the cuts to stamp duty paid on house purchases and the scrapping of the National Insurance rise would continue.
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