The new Chancellor of the Exchequer, Jeremy Hunt MP, has confirmed that the Government will reverse ‘almost all’ of the tax measures announced in the Growth Plan on 23 September that have not already started the legislative process. In summary:
- As confirmed on 14 October, corporation tax cuts will be reversed. It will now rise from 19% to 25% from April 2023.
- The basic rate of income tax will remain at 20 per cent instead of being reduced to 19 per cent.
- IR35 and dividend tax rate reforms will no longer go ahead.
- The introduction of a new VAT-free shopping scheme for non-UK visitors to Great Britain will not be proceeding.
- Alcohol duty rates from 1 February 2023 will now not be frozen.
- The cuts to Stamp Duty Land Tax will remain.
- The planned National Insurance increase will be reversed and the 1.25% health and social care levy will not come into effect.
In addition, the Chancellor announced that the Energy Price Guarantee and the Energy Bill Relief Scheme will now only run in current form until April 2023. Previously, the Government had announced that the support would last until next winter. Now, from April 2023, the support will be re-designed in a way that is likely to deliver more targeted support.
The Chancellor said the changes had been ‘designed to provide confidence and stability’. The Chancellor will still deliver the full Medium-Term Fiscal Plan alongside a forecast from the Office for Budget Responsibility on 31 October.
A press release from HM Treasury can be accessed here.