On 17 October 2022 the new Chancellor, Jeremy Hunt, made a fiscal statement reversing almost all tax measures announced at the Mini-budget on 23 September 2022, other than those that had already been legislated.
Mini-budget proposals that have NOT been reversed and will remain
Reversal of the April 2022 increase in National Insurance rates of 1.25% from 6 November 2022, and the cancellation of the proposed 1.25% Health and Social Care Levy.
Reductions in Stamp Duty Land Tax (SLDT) thresholds,
Permanent increase in the Annual Investment Allowance limit to £1 million
Extension of Seed Enterprise Investment Scheme (SEIS) relief investment and gross asset limits,
Changes to Company Share Option Plan (CSOP) rules, see Mini-budget 2022: Changes to CSOP rules.
The lifting of the cap on bankers’ bonuses.
The introduction of new Investment zones.
The Energy Price Guarantee plan remains but only until April 2023 at which time a Treasury-led review will take place.
Mini-budget measures that HAVE been reversed:
Proposed reversal of the April 2022 1.25% increase in Dividend tax rates from April 2023. This means that dividends will now continue to be taxed at current rates, including the 1.25% increase which came into effect on 6 April 2022. Rates will remain at:
8.75%, 33.75%, 39.35%.
The s.455 tax rate on loans to participators will remain at 33.75%.
Reversal of the 2017 and 2021 Off-Payroll Working reforms. Current rules for Off-Payroll Working in the public and private sectors will therefore continue to apply.
Reduction in the basic rate of Income Tax by 1% to 19% from April 2023. The rate will now remain at 20% indefinitely until economic circumstances allow for it to be cut.
VAT-free shopping for overseas visitors.
Freeze on alcohol duty to February 2023.
The Prime Minister had already announced on 14 October 2022 that Corporation Tax rates will now increase to 25% from April 2023.
In addition, the previous chancellor Kwasi Kwarteng had already announced a reversal of his Mini-budget proposal to scrap the 45% upper rate of Income Tax. See Chancellor reverses cut to 45% tax rate.
The Chancellor also announced that a new Economic advisory council is being formed to provide expert advice to the government.
Conclusion
We of course are living in extremely turbulent times when trying to give up to date tax changes. However, we are hopeful that with (another) new PM in charge, we should hopefully get a clearer picture with a Fiscal Statement/Budget planned for the 31 October 2022.
