Chancellor brings forward further Medium-Term Fiscal Plan measures

17 October 2022 

Chancellor brings forward further Medium-Term Fiscal Plan measures 

Earlier today the Chancellor of the Exchequer, the Rt Hon Jeremy Hunt MP, brought forward a number of measures from 31 October’s Medium-Term Fiscal Plan. The measures are designed to ensure the UK’s economic stability and provide confidence in the government’s commitment to fiscal discipline. 

The Chancellor announced a reversal of a number of the tax measures set out in the Growth Plan on 23 September that have not been legislated for in parliament. 

The following tax policies will no longer be taken forward: 

  • cutting the basic rate of income tax to 19% from April 2023. The basic rate of income tax will therefore remain at 20%. The government aims to proceed with the cut when economic conditions allow 
  • cutting dividends tax by 1.25 percentage points from April 2023. The 1.25 percentage points increase, which took effect in April 2022, will now remain in place 
  • repealing the 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) from April 2023. The reforms will now remain in place 
  • introducing a new VAT-free shopping scheme for non-UK visitors to Great Britain 
  • freezing alcohol duty rates from 1 February 2023 for a year. The next steps of the Alcohol Duty Review announced in the Growth Plan 2022 will continue as planned. 

These changes are in addition to these previously announced decisions: 

  • the additional rate of income tax will no longer be abolished 
  • the Corporation Tax main rate will increase from 19% to 25% from 1 April 2023. 

The Growth Plan measures announced on 23 September that remain in place are: 

  • the reversal of the National Insurance increase and the Health and Social Care Levy 
  • cuts to Stamp Duty Land Tax (which took effect from 23 September) 
  • the permanent increase of the Annual Investment Allowance to £1 million 
  • changes to the Seed Enterprise Investment Scheme (SEIS) including the increased £250,000 investment limit, increased £350,000 gross asset limit, and the increased three year age limit 
  • changes to the Company Share Option Plan (CSOP) including, from April 2023, the increased £60,000 limit of CSOP options that can be issued to employees, and the easing of the ‘worth having’ restriction on CSOP share classes. 

In addition, the Chancellor confirmed that the Energy Price Guarantee and Energy Bill Relief Scheme will continue to support households and businesses with rising energy costs until April 2023. A Treasury-led review will be launched to consider how to provide support after this date, with a view to designing a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need. 

Further details are available on GOV.UK.