Jeremy Hunt, appointed Chancellor on 14 October, has today made an emergency statement on the mini budget. The Government have brought forward these fiscal measures to calm markets and bring stability to public finances following the economic turmoil caused by the Growth Plan announced on 23 September.
Changes to National Insurance and stamp duty will go ahead as planned. However, almost all tax measures previously announced have been reversed. Markets have responded positively following the announcement, with the pound rising and cost of government borrowing falling. Here’s a run down of the key changes:
- Plans to cut the basic rate of income tax to 19% have been revoked. The rate will remain at 20% for the foreseeable future. The top rate of income tax will remain at 45%.
- Corporation tax will go up from 19% to 25% in April 2023 after all.
- Planned VAT free shopping for foreign visitors will not go ahead.
- Cuts to dividend tax rates have been withdrawn.
- Alcohol duty rates will go up for beer, cider and spirits.
- Changes to off-payroll worker rules (IR35) will stay in place, originally introduced in 2017 and 2021.
Scaling back of help for energy bills
The support package, previously announced to be in place for two years, will now only be available until April 2023. A treasury led review will commence to understand how to target measures for those most in need.
The Chancellor will deliver the full medium-term fiscal plan to be published alongside a forecast from the independent Office for Budget Responsibility on 31 October.