A reversal

On the 17th October 2022, Jeremy Hunt, the new Chancellor of the Exchequer, announced a reversal of some of the measures promised in the ‘mini-budget’ some weeks earlier.

The planned cut in the basic rate of Income Tax from 20p to 19p per pound earned will be scrapped, and the basic rate will be fixed at 20p per pound indefinitely.

Other changes

Energy prices were set to be capped for the next 2 years and will now only be capped for the next 6 months.

Taxes on share dividends were planned to be reduced in April 2023, this reduction has now been cancelled.

What this means for you

As the reduction in Income Tax was yet to come into effect, you will notice no difference in the amount of tax you are paying on your income. You can see how much you were likely to save if the planned tax cut were to go ahead in our previous article.

By fixing the basic rate of Income Tax at 20p indefinitely, this means that over time you may eventually be drawn into playing higher income tax bands.

Income Tax bands in Scotland are different and are not affected by the latest announcement.

Find out more

Use our Income Tax calculator to find out how much tax you currently pay, or our Salary Calculator to get a full breakdown of your income.

To learn more, we recommend reading the Chancellor’s latest statement.