On Monday 17 October, the new Chancellor of The Exchequer Jeremy Hunt brought forward some measures from 31 October’s Medium-Term Fiscal Plan.
One of these measures is by stopping the tax policy to cut the basic rate of Income Tax to 19% from April 2023. This means that Income Tax will remain at a rate of 20% and will be so for the future. However, the government aims to decrease the rate when the economic conditions allow it to.
Another tax policy being cut was the decrease in the rate for dividend tax that was to start from April 2023. The new policy was to cut dividends tax by 1.25%. This means that the rates for dividend tax will remain the same as it has been since April 2022.
The dividend tax rates:
Ordinary dividend rate | 8.75% |
Upper dividend rate | 33.75% |
Additional dividend rate | 39.35% |
Some other changes include:
Repealing the 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) from April 2023. The reforms will now remain in place. This will cut the cost of the government’s 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.
Freezing alcohol duty rates from 1 February 2023 for a year. Not proceeding with the freeze is worth approximately £600 million a year. The next steps of the Alcohol Duty Review announced in Growth Plan 2022 will continue as planned. The alcohol duty uprating decision and interactions with the wider reforms to alcohol duties under the Alcohol Duty Review will be considered in due course.
Contains public sector information licensed under the Open Government Licence v3.0