Jeremy Hunt the new UK Chancellor has today ‘junked’ the bulk of his predecessor Kwasi Kwarteng’s tax cuts in an effort to calm markets.
The Chancellor is reversing almost all tax measures that were announced in the growth plan 3 weeks ago that have not started parliamentary legislation he said in a video this morning, these include:-
- Cutting the basic rate of income tax to 19% from April 2023. This is worth around £6 billion a year
- Repealing the 2017 and 2021 reforms to the off-payroll working rules from April 2023. The reforms will now remain in place and will cut the cost of the Government’s Growth plan by around £2 billion a year
- Freezing alcohol duty rates from 1st February 2023 for a year. Not proceeding with the freeze is worth approximately £600 million a year
- Cutting dividends tax by 1.25 percentage points from April 2023.The 1.25 percentage points increase which took effect in April 2022 will now remain in place – this will cut the cost of the Government Growth plan by around £2 billion a year.
- Introducing a new VAT free shopping scheme for non-UK visitors to Great Britain. Not proceeding with this scheme is worth around £2 billion a year.
The Stamp Duty land Tax cuts will remain in place benefiting home buyers and in terms of the energy bills support review, the government has announced unprecedented support within its Growth Plan to protect households - this will be reviewed in April when a more targeted system will then be put in place.
David Phillip Commented “a reversal of the proposed tax cuts could take the edge off inflation and slow down some of the pressure we are seeing on rates for fixed mortgages. With more breathing room, lenders should feel the confidence to put more mortgage products back to the market which is good news.
David Phillip Estate Agents, 86, Leeds Road, Bramhope, Leeds LS16 9AN t: 01134 676 400
Covering Leeds, North Leeds, Bramhope, Adel, Cookridge, Pool-in-Wharfedale and Otley.
