The last few weeks have been…interesting to say the least and as you may know, there was a change to the mini-budget.
New chancellors, reversals on top of reversals and now a new PM have bombarded the headlines. If you’re thinking ‘hang on, isn’t there already a blog about the mini-budget?’ then don’t worry. You’re not having deja vu.
In this blog, we will break down recent updates made by Jeremy Hunt (Chancellor of the Exchequer) to the mini-budget as it currently stands.
Tax cut reversals
In his announcement regarding the new change to the mini budget, Jeremy Hunt stated;
“Firstly, we will reverse almost all the tax measures announced in the growth plan three weeks ago that have not started parliamentary legislation.”
So what will be reversed?
- Cuts to dividend tax rates will no longer move forward.
- The reversal of off-payroll working (IR35) reforms.
- The basic rate of income tax will now remain at 20% and will remain for the foreseeable.
- VAT-free shopping scheme for non-UK visitors.
What is remaining?
As the chancellor stated, anything that was implemented and started since the U-turn will remain. Health and social care levy and stamp duty changes will remain as was implemented in the original plan curated by Kwasi Kwarteng.
One of, if not the most important announcement in the growth plan was the energy price guarantee. While this will not be reversed, Jeremy Hunt implied that longevity cannot be promised.
So while the energy support scheme will be in place from now till April, plans for a treasury-led review on supporting millions post-April 2023.
In addition to this, the new chancellor mentioned that there will be a return to the planned rise in corporation tax from 19% to 25%. Businesses with profits of £50,000 or lower will pay just 19%, banded under the small profit rate.
This will be implemented in April of next year (2023).
Any more changes?
While these U-turns were announced whilst Liz Truss was in office, her departure caused many to question, whether there could be further reversals on top of reversals. Jeremy Hunt has stated he will not put his name forward for the Prime minister campaign, so he will most likely continue as Chancellor of the Exchequer.
How will this new change help?
Hunt also stated that
“the measures I’ve announced today will raise every year around £32 billion”
He also stated that
“more difficult decisions to take on both tax and spending will be expected.”
When that may be is unknown, but rest assured STS Europe will have you covered!
For more information
For more information on the new mini budget announcement, get in touch with us.
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This guide is an informative piece and does not constitute tax advice for individual matters.