The new Chancellor of the Exchequer, Jeremy Hunt, has announced that a number of the tax announcements in the “mini-Budget” on 23 September 2022 will not be proceeding, but other proposals will still go ahead.
Measures which are expected to remain
- National Insurance Contributions / The Health and Social Care Levy - the Government will reduce employees’ NIC by 1.25% from 6 November 2022 and repeal the proposed 1.25% Health and Social Care Levy which was to apply from 6 April 2023.
- Stamp Duty Land Tax - the Stamp duty land tax (SDLT) threshold above which SDLT must be paid will be increased to £250,000 (current threshold is £125,000). In addition, for first time buyers, the threshold on which they pay residential SDLT will increase. SDLT will become payable on properties on or above £425,000 (currently £300,000) and the maximum value of a property on which first-time buyers relief can be claimed will also increase to £625,000 (from £500,000)
- Capital Allowances - the temporary annual investment allowance (AIA) will remain permanently at £1 million.
- Investment zones - plans to set up new Investment Zones across England will go ahead, although the Government will look at how to implement them effectively.
Measures abandoned on 17 October 2022
- The basic rate of income tax will remain at 20%, and will not be reduced to 19% from April 2023, as previously announced
- Dividend income tax cut will not be reduced from 6 April 2023 and the 1.25 percentage point increase that took place on 6 April 2022 will remain in force.
- The Government will not be proceeding with proposals for VAT-free shopping for overseas visitors.
- Alcohol duty will no longer be frozen from 1 February 2022
- The Government will not be proceeding with previously-announced changes to the off-payroll working rules - also known as IR35.
Measures abandoned previously
- Additional rate of income tax - it was announced on 3 October 2022 that plans to remove the 45% additional rate of income tax from 6 April 2023 (except in Scotland) would not take place, so the additional rate will remain in force.
- Corporation tax - it was announced on 14 October 2022 that plans to keep the rate of corporation tax at 19% for all companies will not go ahead. This means that the rate for companies with profits above £250,000 will increase to 25% with effect from 1 April 2023. There will also be rate increases for companies whose profits are between £50,000 and £250,000. These rules have already been enacted. It might be expected that previously enacted changes to the rates of diverted profits tax and the banking surcharge will also go ahead.
