July: Mr Sunak
August: Mr Zahawi
September: Mr Kwarteng
October: Mr Hunt
Whilst this might look more like some sort of Conservative Party novelty calendar, I am of course talking about our list of recent Chancellors. In my previous article, I looked at some of the tax cuts which Mr Kwarteng announced. But just three weeks later, amid huge turmoil and criticism, we now have Mr Hunt reversing many of those cuts. So where are we now, from a private client perspective…
- Sunak: This was increased by 1.25 percentage points from 6 April 2022. As from 6 April 2023, the increase was to be ring-fenced as a new tax (the Health and Social Care Levy).
- Kwarteng: The above increase by Mr Sunak was to be reversed as from 6 November 2022 (including abolishing the introduction of the Health and Social Care Levy).
- Hunt: The above reversal by Mr Kwarteng will continue to go ahead.
Income tax – dividends
- Sunak: This was permanently increased by 1.25 percentage points from 6 April 2022.
- Kwarteng: The above increase by Mr Sunak was to be reversed as from 6 April 2023.
- Hunt: The above reversal by Mr Kwarteng will no longer go ahead. Mr Sunak’s increase will be retained.
Income tax – basic rate
- Sunak: The basic rate tax was due to be decreased from 20% to 19% as from 6 April 2024.
- Kwarteng: The above decrease by Mr Sunak was to apply as from 6 April 2023 instead.
- Hunt: The basic rate will no longer be decreased. It will remain at 20% indefinitely.
Income tax – additional rate
- Sunak: No announcement was made
- Kwarteng: The additional rate was to be abolished as from 6 April 2023.
- Hunt: The above abolishment will no longer go ahead. The additional rate will be retained.
Stamp duty land tax
- Sunak: No announcement made
- Kwarteng: The zero-percent band was immediately increased (23 September 2022), as well as an increase to the thresholds for first-time buyers.
- Hunt: The above changes already implemented by Mr Kwarteng will continue to apply.
So of the above five polices, in two cases we are left with Mr Sunak’s plans, in two further cases we are left with Mr Kwarteng’s plans, and in one case we are left with neither of their plans. Will things now settle down, or are there more announcements to yet come? Do we dare turn the page over to November?
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