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The newly appointed Chancellor, Jeremy Hunt, has confirmed a reversal of almost all of the tax changes set forth in Kwasi Kwarteng's controversial Mini-Budget. The tax measures, which affected various employment and employment tax issues, had been publicized on 23 September as part of the UK's 2022 Growth Plan introduced by the conservative government. It remains to be seen whether Liz Truss's resignation on 20 October 2022 will further change matters.
In summary, the basic income tax rate will not be reduced to 19%, the IR35 off-payroll changes will not be repealed, dividend tax rates will not be cut and the corporation tax rate increase will go ahead,.
The previous changes announced in respect of the banker bonus cap, National Insurance contributions, the Health and Social Care Levy and the Stamp Duty Land Tax will still go ahead, as will proposed limits on strike action in the transport sector.
The following tax changes from the Mini-Budget have been REVERSED:
The tax changes and proposed employment measures that will REMAIN are:
Unless Liz Truss's successor decides otherwise, the Chancellor will deliver the full Medium-Term Fiscal Plan on Monday, 31 October. This is currently expected to introduce further changes on policy in an attempt to quell the concerns around the UK's fiscal policies.
To see our previous client alert on the initial introduction of these tax measures, please use the below link:
United Kingdom: Mini-budget - Employment and employment tax aspects - Baker McKenzie InsightPlus
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