Jeremy Hunt, the latest Chancellor of the Exchequer, announced yesterday, 17 October 2022 that he was scrapping most of the mini-budget measures announced by his predecessor three weeks ago.

So, what has been scrapped and retained from we what we highlighted in our blog in September?

Income Tax/ NI reduction
Cutting the basic rate by 1p to 19p will be reverted. The basic rate of income tax will stay at 20% indefinitely.

The abolishment of the 45% additional rate income tax bracket has been scrapped. So, higher earners – individuals earning above £150,000 will pay an additional 5% in income tax.

The NI increase of 1.25% is retained and will not be discontinued from November 2022.

Dividend Rate
Dividend income is typically declared on a Self-Assessment tax return because it is distinct from what is earned through PAYE.

This tax was increased in April but was supposed to be reversed in April next year. This is no longer happening as the reversal will now be cancelled. The 1.25 percentage points increase, which took effect in April 2022, will now remain in place.

Corporation Tax
Jeremy Hunt will be cancelling the rise from 19% to 25% which was originally planned by Ex-Chancellor Rishi Sunak.

IR35 Legislation for Contractors
IR35 reforms which were introduced in 2017 and 2021 will continue to stay, so this has been reversed from what was announced at the mini-budget.

Author: Mary Asante | HRi Director