In the increasingly turbulent regime of the current government, newly appointed Chancellor of the Exchequer Jeremy Hunt MP announced that the tax measures set out on 23 September by former Chancellor Kwasi Kwarteng in the growth plan, were being reversed.
In his statement on 17 October, Jeremy announced that:
- The rate of corporation tax would be increased to 25% from April 2023, reversing the proposed reduction to 19%;
- The basic rate of income tax would remain at 20% indefinitely;
- The domestic energy support scheme would run until April 2023 and then be reviewed. He confirmed that the Energy Bill Relief Scheme (for business) would also run until April 2023 and be reviewed;
- The planned increase of 1.25% in income tax rates on dividends will remain and not be abolished;
- The proposed VAT free shopping scheme for non-UK visitors to Great Britain will no longer take place;
- The abolition of the 1.25% levy on National Insurance will remain and the rate will revert to 13.8% for Class 1 employer contributions. This will take effect from 6 November.
He also confirmed some elements of the government's growth plan would remain in place. These include:
- The stamp duty threshold will increase from £125,000 to £250,000;
- The temporary increase to £1m for the Annual Investment Allowance will be made permanent.
The other measures announced on 23 September, such as the creation of investment zones and the review of regulation in agriculture, remain in place.
Further analysis of the change in government tax measures will be available on the CLA's cost of living hub on 21 October.