Jeremy Hunt reverses almost all of Liz Truss' tax cuts

The new Chancellor Jeremy Hunt has reversed virtually all the tax measures (that were not already previously reversed) from Kwasi Kwarteng’s mini-budget, in a statement made on Monday 17th October. The only exception being the National Insurance and Stamp Duty cuts and even these appear to be proceeding on the basis they are too far progressed through the Parliamentary process to reverse.

Mr Hunt acknowledged that whilst Govenment cannot eliminate instability in markets, they do have a role to play. He also acknowledged that there will be more tough times ahead and that he would need to make tough decisions to protect the UK economy. We've put a brief summary of the announcements below.

Still Happening:

• Reversal of the National Insurance increase of 1.25% from November. This is calculated to save the average worker £330 a year.
• Stamp Duty reductions to benefit first time buyers with the NIL band being doubled to £250k and first-time buyers benefitting from a new NIL threshold of £425k up from £300k.
• Support for households and businesses with the introduction of an energy price cap but only until April.

No longer happening:

• The decrease in tax on dividends.
• Freeze on alchohol duty.
• VAT free zones.
• The abolition of the Additional Rate of Income Tax of 45%.
• The proposed reduction in the basic rate of Income Tax by 1p. This will stay at 20p.
• Support for households and businesses with the introduction of an energy price cap after April. This will be subject of a new review.
• Postponing the increase in Corporation Tax. It will not now stay at 19%.
• Reversal of the off-payroll changes. Clients will remain liable for making status determination statements.

We now await details of the medium-term fiscal statement at the end of October and wonder what is coming next! However it seems that tax increases and spending cuts seem inevitable.