Having been appointed as chancellor last week following Kwasi Kwarteng’s resignation, Jeremy Hunt has dismantled many of the policies announced in the former chancellor’s September mini budget in a major U-turn for Liz Truss’s government.
The new chancellor, who brought forward his fiscal statement by two weeks in a bid to stabilise financial markets, made several key reversals worth noting in his televised address:
- The 1p cut in income tax will be deferred “indefinitely”.
- Corporation tax will rise to 25% from 19% in April
- A planned 1.25% cut to dividend tax has been abandoned. The Government expects to save around £1bn a year by maintaining the tax at a higher rate.
- A freeze on alcohol duties has been scrapped.
- Jeremy Hunt has axed plans to scrap the 2017 and 2021 reforms to the IR35 off-payroll working rules.
- The VAT-free shopping scheme for tourists has also been
- Having originally been a universal support package lasting two years, the energy price guarantee will now only remain universal until April 2023. It will then become targeted and capped, meaning it will be limited to just some households from then on.
- Ministers will launch a review to consider how to support households and businesses with energy bills after April 2023.
Measures that remain unchanged
- A 1.25% cut to National Insurance from next month has been maintained.
- The planned cancellation of the Health and Social Care levy remains.
- The cut to Stamp Duty also survives.
- There remains no cap on bankers’ bonuses.