It’s in, it’s out…it’s on, it’s off! Trying to keep up with the latest government plans are making our heads spin at the moment. The newly appointed chancellor Jeremy Hunt has reversed almost all of the recent mini-budget commitments made by previous chancellor Kwasi Kwarteng last month, in a statement made at the Treasury today (17th October).
He confirmed that the basic rate of income tax will remain at 20% indefinitely until the economic situation stabilises, marking a U-turn from previous plans to lower the rate to 19%.
However, the National Insurance contribution rates due to be cut by 1.25% for employees, employers and the self-employed, effectively reversing the uplift introduced in April 2022 will still stand. This means the increased National Insurance rate of 1.25% for employees and employers that happened in April is being reversed with effect from 6th November. The ringfenced health and social care levy of 1.25% due to be introduced from April 2023 will also not go ahead.
The September mini-budget also announced a reversal of IR35 reforms for off-payroll workers but this will no longer be happening either.