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New chancellor Jeremy Hunt's statement ahead of October 31st
Today yet more changes and reversals to the Kwarteng mini-budget that wasn’t a budget.
In short, most of what he announced has been ditched by the new chancellor Jeremy Hunt.
I am hesitant to say that these new announcements are ones that are going to remain. After all, we are living in “interesting times”. Things could change still further by the time we get to the 31st of October when the chancellor will reveal the full financial statement.
What we know now:
The basic rate of income tax remains at 20% and likely to stay there for the foreseeable future.
The 45% higher tax rate is here to stay.
The planned reversal in the increase to Dividend Tax which took place in April has been cancelled.
The repeal of the 2017 and 2021 changes to off-payroll rules, AKA IR35, is now cancelled. This means the burden of proving that a contractor is not a disguised employee now rests again with the employer.
The help with energy costs is still going ahead but only until April. From April there is likely to be a different and more targeted regime to help with energy costs.
The planned increases in the duty rates for beer, cider, wine and spirits will now go ahead.
VAT free shopping for non-UK visitors scrapped.
You may be pleased to know that the cuts to stamp duty and National Insurance remain in place. These are very small crumbs of comfort.
The likelihood is that there will be more announcements on the 31st October.
We will, of course, then, give you a full rundown of any changes which will impact you or your business.
It ain't over until the fat lady sings. At the moment we seem to have no idea whether the lady in question is clearing her throat or even thinking about going to perform.
What is clear that the Conservative government is in turmoil right now. The politic gossip columns are humming with different leadership scenarios. None of which seem to involve Liz Truss in them...
Initial reactions from the markets seem to be positive about Jeremy Hunt's new plans for GB PLC. At time of writing the pound was making tiny gains against the dollar. But still a long way off the dizzy exchange rate heights in August of US $1.20 dollar to the pound. Bear in mind that at this point last year £1 would buy you US $1.37.
As a fellow business owner, my hope is for some stability and certainty in the months ahead. After all, that is what we all need to be able to plan and take decisions for the future. However, my sense is don't assume that we are now entering into stable waters.
This is what I still think we can rely on going forward:
The cost of living crisis is going to bite hard over the winter
It is important to keep an eye on your business’s cash going forward
It will be harder to get access to finance
The turmoil will bring opportunities for business owners who are managing their finances carefully and prepared to be bold and take good decisions.
If you are uncertain about what the future holds or how to cope with the headwinds coming your way, then get in touch. We are here to help.
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