Chancellor Jeremy Hunt reverses Mini Budget Announcements
Tuesday 18 October, 2022
The new Chancellor Jeremy Hunt has reversed "almost all" of Kwasi Kwarteng’s original mini-budget announcements as a direct result of the financial fallout and increased fiscal pressures that the original decisions have caused. Within this article we have set out the new announcements at a glance.
- Cut in basic rate of income tax from 20% to 19% from April 2023 in England, Wales and Northern Ireland. This announcement has been reversed and Hunt has said any future cut will "only take place when economic conditions allow for it and a change is affordable". The basic rate of income tax will remain at 20%.
- 45% higher rate of income tax will be abolished for taxpayers in England, Wales and Northern Ireland therefore there will be one single higher rate of income tax of 40% from April 2023. The removal of the 45% top rate of Income tax for high earners has been scrapped.
- Corporation tax rise due April 2023 has been cancelled – rise was expected to be from 19% to 25%. Cancelling the rise has been reversed. Therefore the rise will still take place as previously expected from 19% to 25% in April 2023.
- Reversal of the recent 1.25p rise in National Insurance
- No stamp duty on first £250,000, increased from £125,000
- No stamp duty for first time buyers rises to £425,000
- Freeze on energy bills for two years from October 2022. The energy freeze will now last until April 2023.
- The rules which limit bankers' bonuses will be scrapped
- The planned increases in the duties on beer, cider, wine and spirits to be cancelled. The decision to freeze rates in Alcohol has been scrapped.
- The decision to abolish VAT on shopping for non-UK visitors has been scrapped.
If you are confused by the reversals of announcements raised in the old mini-budget and would like to know how the new measures will affect your financial situation and mortgage payments, please contact your Financial Adviser or Mortgage Broker at Thomas Oliver.