Since last month, the new Chancellor Jeremy Hunt has essentially scrapped the plan announced by Kwasi Kwarteng to deliver economic growth and he gave a hint of what is to come in his UK Tax and Spending plan on Thursday 17th November, as it has now been delayed two weeks.
In short, most of what was by announced by Kwasi Kwarteng has been ditched and as it stands the following now applies:
- The basic rate of income tax remains at 20% and is likely to stay there for the foreseeable future.
- The 45% higher tax rate is here to stay.
- The planned reversal in the increase to Dividend Tax which took place in April has been cancelled.
- The repeal of the 2017 and 2021 changes to off-payroll rules, also known as IR35, is now cancelled. This means the burden of proving that a contractor is not a disguised employee now rests again with the employer.
- The help with energy costs is still going ahead but only until April 2023. From April there is likely to be a different and more targeted regime.
- The planned increases in the duty rates for beer, cider, wine and spirits will now go ahead.
- VAT free shopping for non-UK visitors scrapped.
- The cuts to stamp duty and National Insurance remain in place.
Initial reactions from the markets seem to be more positive about Jeremy Hunt’s new plans.
I think we are all hoping for some stability at least for now so we can all plan and take decisions for the future.
Going forward what we do know is that:
- The cost-of-living crisis is going to make this difficult for families and businesses
- It is important to keep an eye on your business’s cash going forward
- It will be harder to get access to finance
- The turmoil will bring opportunities for business owners who are managing their finances carefully and prepared to make bold decisions.
If you are uncertain about what the future holds or have any concerns about anything, as always please give us a call for a chat. Sometimes just chatting through a worry can help.