Mini-Budget Take.2: What’s Changed with Jeremy Hunt?

Mohit Baheti | Debitam By Mohit Baheti |
mini-budget

The full list of changes after the infamous U-Turn:

So, it's been a little over 30 days since we had our last mini-budget. How things have changed! Jeremy Hunt is now in charge and already scrapped a huge proportion of Kwarteng's so-called mini-budget. In this blog post, we're going to give you a breakdown of the full list of changes since last week. Look at what's changed and how it might affect you as a business owner or self-employed, or as a taxpayer in general. Stay tuned for the nitty gritty details!

First of all, forget what Kwarteng said about tax cuts! No, but seriously, only a few changes brought by the last chancellor remained. Before we go ahead, click here to refresh your memory on Kwarteng, earth moving mini-budget 2022.

The List of Changes on Mini-Budget:

  1. Corporation Tax Rate:
    Corporation tax will increase to 25% as of April 2023. The plans to freeze it to 19% now stand withdrawn. To get some helpful tips as to how your business would be affected, check our experts' opinion here.
  2. Income Tax - Basic Rate:
    The government has indefinitely postponed a planned basic rate tax deduction of 20p to 19p. Reverse your saving plans, it's cancelled people… to be honest it would have saved only £375 a year and doesn’t make any significant difference.
  3. Energy Price Cap:
    The energy price cap will only last until April of next year, instead of October 2024. Energy bills were initially set to be frozen at £2,500 for the typical household for two years but now it looks like they'll go up after April. Help is coming though-a Treasury led review on how energy companies can support those who are vulnerable or struggling with their finances will take place soon! This will affect self-employed, freelancers who work from home closely. To find out how to claim your energy bills while working from home, read the article.
  4. Alcohol Duty:
    This basically means no more generous rounds in your local pub. The price of booze will increase, and this is NOT the landlord's fault! Depending on your preference in beverage; this means a 7p increase in a pint of beer, 4p in pint of cider, 38p on a bottle of wine and £1.35 on a bottle of spirits. (no more sambuca shots on Saturdays).
  5. Dividend Rate Cut:
    In another words, the 1.25% increase that was applied in last April is here to stay. Dividends can be a confusing subject, especially for new limited company owners. To find out more about how to pay yourself a dividend, check our experts guide and
  6. VAT-free Shopping for Tourists:
    This has been axed by Rishi Sunak and attempted to be brought back by Kwarteng, but then reversed to Rishi`s plan again by Hunt. Confusing? In a nutshell: tourists will pay VAT when shopping. To learn more about VAT, scroll down on our VAT-hub.

The List of what remains from Kwarteng`s Mini-Budget:

  1. Stamp Duty Cut: remains
    Previously, stamp-duty was to be paid on the first £125,000 of any property, with Kwarteng's mini-budget, this threshold went up to £250,000. One of the handful of changes that Jeremy Hunt left on the mini-budget saves home-buyers up to £6,250.
  2. National Insurance Cut: remains
    With the basic income tax rate cut scrapped, Class 1 NI cut gives still a bit of life-line to millions of employees across the country in savings. Depending on how much you earn, with the cut remains, employees can save themselves from facing a higher deduction for National Insurance from this November 2022.
  3. IR35 Rules: remains
    Off-payroll working rules, introduced by Kwarteng among the few that survives from the mini-budget. It means as a self-employed or contractor you area still in charge of deciding your own tax status instead of your client. IR35 has been one of the most modified schemes, introduced by the government and different administrations over the recent years. To get a full breakdown, check our guides to IR35 rules for self-employed, freelancers and sole traders here.

The full list of changes have been released and there's a lot to unpack. We've gone over the key points so you can be up-to-date with how the government's U-Turn might affect your business. Stay tuned with our blog for the latest budget news for business owners - we'll make sure to keep you in the loop.

Mohit Baheti | Debitam By Mohit Baheti |
Note: Please note that the content of the above blog and the aforementioned information are solely for the purpose of awareness and are informative in nature. The content is designed with intent to ease the understanding while preserving the essence and importance of the compliance rules and shall not be considered as an ultimate replication of the rules. Debitam does not own any responsibility whatsoever for any unpleasant event that may arise due to the misinterpretation of a specific part or whole of the information.

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