New Chancellor reverses almost all tax cuts

Tax Cuts

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Xeinadin Group

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The new Chancellor, Jeremy Hunt, has this morning made an emergency statement bringing forward a range of measures from the economic plan he is planning to reveal in full on the 31st October.

Income tax

The basic rate of income tax will remain at 20p indefinitely – instead of being reduced to 19p from April 2023.

Energy

The cap on energy prices charged to households is only guaranteed until April 2023, but will then be reviewed.

The government’s Energy Price Guarantee was originally put in place for two years – to limit the price that suppliers could charge for each unit of energy.

Now that will be limited to six months to cover this winter. The Treasury will review support given from April, but the Chancellor said there would be “a new approach” targeting those most needed.

This is expected to save the Government around £150m and comes amid falling gas prices.

National Insurance

The cuts to National Insurance remain.

Stamp duty

Cuts to stamp duty remain, no stamp duty is paid on the first £250,000 of a property’s value for all buyers in England and Northern Ireland; for first-time buyers, it is £425,000.

VAT free shopping

The plan to offer VAT-free shopping to foreign visitors has been scrapped.

Alcohol duty freeze

The planned freezing of alcohol duties has been scrapped.

Dividends

The dividend tax cut will be abolished.

Corporation tax

As announced last week, corporation tax is due to rise from 19% to 25% from April 2023.

The Chancellor concluded his statement:

“The most important thing we need is stability. Instability affects prices of things and the price of mortgages.

“There will be more difficult decisions on tax and spending. All Government departments will have to redouble their efforts in finding areas of spending to be cut.

“I am confident about the long term. The UK will always pay its way – and we will take whatever tough decisions we need to, to make that happen.”