Chancellor's emergency fiscal budget – Jeremy Hunt scales back energy support and reverses tax reforms: Here's what you need to know
New Chancellor Jeremy Hunt has reversed a host of tax reforms and scaled back energy help previously announced in September's mini-budget in an effort to reassure markets and ease financial turmoil that has triggered a spike in mortgage rates. Here's what the shake-up means for you.
Key announcements made by Hunt, who replaced Kwasi Kwarteng on 14 October, include shortening the energy price guarantee from two years to just six months, and scrapping a planned cut to the basic rate of income tax.
Below we round up what we currently know. The Government has said further fiscal measures will be published on Monday 31 October.
The energy price guarantee will only be in place until April 2023
The Treasury will lead a review into how to support people with energy bills beyond April 2023, with the aim of designing a new approach that will cost less than the guarantee scheme but still help struggling households (and businesses).
Most people are on the energy price cap and do not need to do anything for now. However, see our full analysis for details on how the shake-up will likely impact your energy bill.
The Government's energy price guarantee was introduced on 1 October to replace Ofgem's price cap. Under the guarantee, energy bills are far cheaper than they would've been this winter.
Other announcements include reversing most tax measures from the mini-budget, though national insurance and stamp duty cuts will remain
- A basic-rate tax cut to 19% from April 2023 will be scrapped. Hunt said basic-rate tax will remain at 20% "indefinitely" until economic circumstances allow for it to be cut. See our Tax rates 2022/23 guide for a breakdown of how much tax you currently pay.
- The Government will reverse almost all other tax measures announced in last month's mini-budget – excluding plans to cut national insurance and stamp duty, which go ahead as planned. Reversals include:
- Scrapping a planned freeze on alcohol duty from February 2023.
- Ditching a 1.25 percentage-point cut in dividend tax planned from April 2023.
- The 2017 and 2021 reforms to IR35 off-payroll tax will remain. This means workers across the UK providing their services via an intermediary, such as a personal service company, will NOT regain responsibility for determining their employment status and paying the appropriate amount of tax and national insurance.