On Monday 17th October, new chancellor Jeremy Hunt issued an emergency statement that reversed many of the plans laid out in his predecessor Kwasi Kwarteng’s ‘mini budget’. We unpick some of the headline changes below.
Changes to income tax, energy bill support, and alcohol rates
· Hunt has revoked Kwarteng’s plans to reduce income tax, retaining the basic rate at 20%.
· Hunt also removed are the planned cuts to the tax paid on shareholder’s dividends and the energy price guarantee, which is now set to be reviewed in April 2023.
· Planned increases for the so-called ‘sin taxes’ (those applicable to beer, cider, wine, and spirits) will now go ahead, rather than being cancelled.
Cuts to National Insurance and Stamp Duty remain in place
· The new Chancellor committed to property tax cuts, meaning first-time buyers will not pay Stamp Duty on the first £425,000 of a property’s value.
· Hunt also confirmed plans to reverse the 1.25% rise in National Insurance contributions.
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