Jeremy Hunt, the newly appointed Chancellor of the Exchequer, pretty much reversed everything Kwasi Kwarteng announced during his mini-budget on the 23rd of September. So where does that leave us now?
The country's economic reality has been recognised, and Jeremy Hunt has been appointed to improve it!
I've been following all these announcements quite closely. I was interested in the change of direction by the newly appointed Prime Minister, Liz Truss, but to find out everything was uncosted, threw the UK into far more debt and sent the markets haywire, well, I soon realised things needed to change.
"Thankfully, I didn't need to hold my breath for very long!"
When it was announced that Jeremy Hunt had been appointed as Chancellor, I knew there would be an immediate statement. He's a big beast in the Tory party, and it seems that the Tory Grandees wanted things back to the conservative norms of fiscal prudence.
And yesterday, he pretty much reversed everything that Kwasi announced, other than the National Insurance and property purchase tax cuts. So, was that the biggest u-turn in the entire economic history of the United Kingdom?
In his announcement, Jeremy Hunt was very specific by saying:
The 1p cut in the basic rate of income tax won't happen in April 2023. There is little prospect of it being implemented ever
The off-payrolling legislation (IR35) remains in place
Dividend tax rates remain at the current rates in 2022/23 (as increased by 1.25%), even though the Health & Social Care Levy has been repealed
VAT-free shopping for non-UK visitors will now not be introduced
However, he was not explicit about the Investment Zones, but HM Treasury is firmly in control again so it doesn't look as though they'll be introduced any time soon. There's too much tax to be had from those areas. Also, the Annual Investment Allowance remains at £1m, though we may learn more about various tax reliefs in his formal 31st of October budget.
The country's economic reality has been recognised, and Jeremy Hunt has been appointed to improve it. He wants less government debt which means less interest on that debt.
"And that, in turn, means a more favourable rate of interest!"
I wonder what he will announce in the next few days? It's a real whirlwind for any tax advisor right now and I'm a little unsure of what to blog about in case the situation changes again. All we can do is wait and see.
One thing I do know is that Trussanomics is well and truly dead in the water.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about what Jeremy Hunt announced and how it affects your tax situation, it may be a great idea to give me a call on 01908 774323 and let's see how I can help you.
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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