Britain's new Chancellor of the Exchequer, Jeremy Hunt, has reversed almost all tax measures that were announced in the mini-Budget just three weeks ago. And yes, this is now the third time we've edited this blog...
So, buckle in for more of a Conservative rollercoaster as we update you with yet more U-turns and shifts in policy. Here's our advice and thoughts as of Monday 17th October 2022. Who knows when we'll be dipping in to edit it next?
If you’ve been following closely, you’ll see that most of the tax changes we wrote about after the then chancellor’s ill-fated ‘mini-Budget’ on 23rd September have now been reversed. Here are the main changes to highlight:
Corporation Tax will now rise from 19% to 25% from April 2023.
Whilst the abolition of the Health & Social Care Levy stays, almost all other tax measures announced in the mini-budget will now be scrapped.
This includes the basic rate tax band remaining at 20% (as opposed to being cut to 19% as previously announced) and the higher rate tax band of 45p which will now not be abolished.
Support for the increases we all face in energy bills is also being scaled back.
The BBC News website has a comprehensive overview of all of the announcements made by the Government over the past few days. There may be more detail to be added to this, and a further ‘Budget’ statement on 31st October. We will update you as and when any further information is shared.
Think about any expenditure that can be delayed until April and any revenue that can be brought forward.
Consider your strategy and pricing more generally. Allowing for inflation at 9%, combined with the increase in Corporation Tax, the two increases together amount to a 17.7% price increase that businesses need to maintain profit margins in real terms.
These are interesting times and whilst we can’t control what announcements the government will make next, we can all focus on building sustainable, resilient and beautiful businesses. If there are any questions you have and any help in planning ahead, please do not hesitate to get in touch.