The UK government has today (17 October 2022) reversed its plan to repeal the extensions to off-payroll tax arrangements legislated in 2017 and 2021.
The extensions made employers responsible for assessing the employment status of contractors they engage through intermediate companies and thus determining whether the contractors should pay income tax and National Insurance Contributions (NICs) through the pay-as-you-earn system. The rules attracted considerable opposition and the Growth Plan 2022 (the Growth Plan) announced on 27 September by the then-Chancellor of the Exchequer Kwasi Kwarteng announced they would be repealed with effect from April 2023.
Today's reversal means the measures will now remain in place for next year at least, saving an estimated GBP1–2 billion a year in tax revenues.
Many of the other measures from the Growth Plan are also being dropped, the new chancellor Jeremy Hunt has announced.
The basic rate of personal income tax will remain at 20 per cent indefinitely and the plan to cut the dividend tax rate by 1.25 percentage points by April 2023 will no longer be going ahead. The 1.25 percentage point increase, which took effect in April 2022, will now remain in place.
As announced last week, the government will not now proceed with proposals to remove the additional 45 per cent rate of income tax or to cancel the planned increase in the corporation tax rate. Corporation tax will next year be increased from 19 to 25 per cent for companies earning annual profits above GBP50,000.
However, the proposed elimination of stamp duty land tax for properties under GBP250,000 in England and Northern Ireland is still going ahead. So is the abolition of the previous government's 1.25 per cent increase in NICs, which has now been formally enacted by parliament.
The GBP1 million annual investment allowance, the seed enterprise investment scheme and the company share options plan will also continue.
Further tax measures will be announced on 31 October 2022.
News Source：【STEP 2022/10/17】