A couple of weeks ago we highlighted main aspects of the previous
chancellors mini-budget. A lot has happened in the house of parliament recently
and the new chancellor, Jeremy Hunt reverses most of the mini-budget tax cuts.
Below you can find the updated version from Jeremy Hunts
statement.
National Insurance
One of the few things that is staying, is the reversal of
the National Insurance social care levy. From 6th November 2022, the
extra 1.25% will no longer be added to National Insurance contributions. This
means a saving of £330 per year for nearly 28 million people.
Originally the extra 1.25% was introduced to fund the NHS,
however, this will now be funded through general taxation.
Income Tax
The biggest reversal is in the rates of income tax. The
ex-chancellor said that income tax will be down to 19% from April 2023, however,
this will now not go ahead. It will remain at 20% for now.
The abolition of the 45% higher rate income tax has also
been reversed. The 45% higher rate income tax band now means that the higher
rate earners will pay income tax on earnings over £150,000
Corporation Tax
The reversal on corporation tax for companies means
that the increase from 19% to 25% will go ahead after all. This will come into
action from April 2023. Only businesses with profits of £250,000 or greater
will be taxed at the full 25% rate - about 10% of companies in the UK.
Any companies with profits of £50,000 or lower, will pay at
the 19% rate
Benefits
Rules around the benefit system will remain and unchanged. Benefits
can be reduced if people don’t actively search for job commitments. Around
120,000 more people on universal credit to be encouraged to actively seek more
work, the over 50’s to be given extra time to work with coaches to help them in
the return to work.
What else has been cancelled?
Other measures that have been cancelled include:
·
VAT-free shopping for overseas visitors,
- A
freeze on alcohol duty. Planned increases in the duty rates for beer,
cider, wine and spirits will now go ahead
- Cuts
to the tax paid on shareholders' dividends - the increase introduced in
April will now stay in place
Energy
A typical household using both
gas and electricity would pay no more than £2,500 annually for two years the government
said. However, the energy price guarantee now only covers this winter. It will
be in place until April next year. A review will look at what measures should
be put in place after this date.
Stamp Duty
Stamp duty will remain in place.
In England, no stamp duty is paid on first £250,000 and for first time buyers,
this is increased to £425,000. To check out Wales’ stamp duty rates, please click here
These rules seem like they
will stay in place now but, as always, we will keep you up to date with the
latest
