Just over three weeks ago, then-chancellor Kwasi Kwarteng unveiled his tax-cutting mini-budget to MPs which caused economic turmoil in the UK.

Following a dramatic U-turn on a promise to abolish the 45% higher rate of income tax after backlash from the government’s own Conservative MPs earlier this month, Mr Kwarteng has now been sacked – and many of the other pledges in the mini-budget have been torn up.

On Friday, the government scrapped its decision to ax the rise in corporation tax to 25% next year.

Addressing the nation in a statement on Monday morning, newly appointed chancellor Jeremy Hunt confirmed that most of the other mini-budget proposals have also now been thrown in the bin as Prime Minister Liz Truss seeks to hold on to her premiership.

Hunt goes further than expected – as Tory MPs say it’s ‘when not if’ Truss goes – follow latest on politics

Here is a breakdown of what was in the government’s mini-budget at the end of September and what has changed:

Income tax:

What was pledged?

• The government pledged that the 45% higher rate of income tax would be abolished.

• There was a promise to reduce the basic rate of income tax to 19p in the pound by April 2023, meaning 31 million people would be better off by an average of £170 a year.

What have you changed?

• The government rowed back on its decision to scrap the highest rate of income tax earlier this month.

• Mr Hunt said the basic rate of income tax would now “indefinitely” stay at 20p until economic conditions allowed a reduction.

“It is a deeply held Conservative value – a value that I share – that people should keep more of the money that they earn,” the new chancellor said.

“But at a time when markets are rightly demanding commitments to sustainable public finances, it is not right to borrow to fund this tax cut.”

corporation tax

Please use Chrome browser for a more accessible video player

Truss confirms corporation tax U-turn

What was pledged?

• The government said it would cancel a UK-wide rise in corporation tax which was due to increase from 19% to 25% in April.

What have you changed?

• Ms Truss confirmed in a brief press conference on Friday that she was dropping this flagship policy of her leadership campaign and that corporation tax will go up from 19% to 25% in April after all.

energy package

A handheld SSE smart meter for household energy usage is held next to an energy-efficient LED light bulb.  Families across Great Britain will find out on Friday how tough energy bills will be this winter but they may have to wait to discover what the Government will do to help Picture date: Thursday August 25, 2022.

What was pledged?

• The government said household bills would be cut by an expected £1,000 this year with aid from the energy price guarantee and £400 grant. The energy price guarantee had been due to cap prices for two years.

What have you changed?

• Mr Hunt confirmed the energy price guarantee will now end in April after which time the government will look to target help on those most in need.

IR35 rules

Piggy bank with business stuff, business and finance concept, vintage color tone.

What was pledged?

• The government promised to “simplify” IR35 rules – the rules which govern off-payroll working. It promised to change the regulations so pension funds can increase UK investments.

What have you changed?

• Mr Hunt confirmed the government will now abandon these proposed IR35 changes.

alcohol duty

What was pledged?

• The government said in the mini-budget that planned increases in the duties on beer, for cider, for wine, and for spirits would be cancelled.

What have you changed?

• Mr Hunt confirmed this will now no longer be the case, with the price of beer, cider, wine and sprits soon rising.

Dividend tax change

Please use Chrome browser for a more accessible video player

Truss braces for tumultuous week

What was pledged?

• The government announced in the mini-budget that from 6 April 2023, the additional rate applying to dividend income would be abolished and the 1.25% rise in the dividend rates, initially brought into force in April this year, would be reversed.

What have you changed?

• Mr Hunt said the government will no longer reverse the 1.25% rise in the dividend rates.

VAT free shopping

File photo dated 09/15/14 of shoppers on Oxford Street in central London.  Shoppers started Christmas shopping early as sales at clothes stores came within touching distance of pre-pandemic levels but online sales fell to lows not seen since the start of the pandemic, according to official statistics.  The Office for National Statistics (ONS) said it helped push overall sales volumes up in October by 0.8% - ending a five-month run of falling or flat volumes.  Issue date: Friday November 19, 2021.

What was pledged?

• The government pledged VAT-free shopping for overseas visitors.

What have you changed?

• Mr Hunt said this policy has now been scrapped.

stamp-duty

Estate agents boards are lined up outside houses in south London, Britain June 3, 2014. REUTERS/Andrew Winning/File Photo

What was pledged?

• The government promised to cut stamp duty which is paid when people buy a property in England and Northern Ireland. It said no stamp duty would be paid on the first £250,000 of any property and no stamp duty on the first £425,000 for first-time buyers.

What have you changed?

• Mr Hunt confirmed this is one of very few policies in the controversial mini-budget which will remain.

National Insurance

Please use Chrome browser for a more accessible video player

Truss would ‘cut national insurance’

What was pledged?

• The government said it would reverse the recent rise in National Insurance since 6 November. Workers and employers have paid an extra 1.25% since April 2022.

What have you changed?

• Mr Hunt confirmed that, like stamp duty, this policy has survived the mini-budget cull.

Bankers’ bonuses

This photo has been successfully downloaded.  (Look for it in your Downloads folder or the last place you saved a file.)

What was pledged?

• The government announced it was scrapping rules which limit bankers’ bonuses.

What have you changed?

• Mr Hunt did not mention bankers’ bonuses in his statement. But a Treasury source has told Sky News there is “no change in policy there.” They said the cap “was bad policy” adding that it “didn’t cap bankers pay and was bad for financial stability”.

Leave a Reply

Your email address will not be published. Required fields are marked *