Lineas - Friday, Jan 27, 2023
Hunt reveals U-turn on all the mini-budget
Chancellor Jeremy Hunt has announced that the government will reverse almost all the tax measures announced in its recent growth plan.While it will still go ahead with cutting stamp duty, a planned 1p cut to the basic rate of income tax will now be shelved “indefinitely” while the energy price guarantee will be watered down. Help with energy bills was due to apply universally to every household for two years but Hunt says this will only last in its current form until next April. The Treasury will now conduct a review to study how best to provide targeted support to households and businesses beyond that time.In a special broadcast, the Chancellor explained: “Whilst we will continue with the abolition of the health and social care levy and stamp duty changes, we will no longer be proceeding with the cuts to dividend tax rates, the reversal of off-payroll working reforms introduced in 2017 and 2021, a new VAT-free shopping scheme for non-UK visitors or the freeze on alcohol duty rates.”
Income tax U-turn
He said it was not right to borrow to fund the income tax cut, which would have reduced the rate to 19%.
Last week, Liz Truss performed another humiliating U-turn by announcing she would not cancel the scheduled rise in corporation tax from 19% to 25% next year. The Prime Minister’s stamp duty cut was also universally panned by mortgage brokers who labelled it a catalyst for stimulating an overheated property market. Then chancellor Kwasi Kwarteng raised the threshold before stamp duty is paid to £250,000 and for first-time buyers, to £425,000.The Chancellor, who is a landlord, will deliver the full Medium-Term Fiscal Plan to be published alongside a forecast from the independent Office for Budget Responsibility on 31st October.