Yesterday, the newly appointed Chancellor Jeremy Hunt confirmed that the controversial mini-budget announced a few weeks back has now been reversed, almost in its entirety.
The aim was to reduce the unsupported public debt by £32b and restore the confidence of the market (which it sort of did). So, what will now be happening and what is now reversed?
– Corporation Tax (CT) cut – The planned rise from 19% to 25% will now go ahead.
– Basic rate income tax cut – It will remain at 20% for the foreseeable future.
– Abolition of the additional rate of income tax– 45% rate of income tax will remain for the foreseeable future.
– Dividend tax cut – No cut to dividend tax rates.
– IR35 repeal – Contractors will no longer see a repeal to the 2017 and 2021 changes to IR35.
– VAT-free shopping for overseas visitors.
– Freezing alcohol duty rates from 1 February 2023 for a year.
– The two-year energy caps will now be guaranteed only until April 2023, which then is to be reviewed.
The measures from the mini-budget that will go ahead:
– National Insurance (NIC) cut – the reversal of last April’s increases in National Insurance is happening.
– Stamp Duty cut in England and Northern Ireland – this has already been actioned.
What does this mean for you? Well, that’s harder to say as much depends on what actually gets implemented and when – that depends on whether the government stays in power and really those are topics that we aren’t qualified to comment on! What we can commit to is making sure that we share and continue to share the important information that our SME clients need to know, no matter how many times things are changed, how complicated rules are to understand, or even how unfair it is that SMEs are being caught in the crossfire and having to get their heads around new requirements all the time… Let’s see what next week brings!
Get in touch with your local AIMS Accountant to help with your business or individual finances.