Blink and you’ll miss it! The world in politics seems to be faster paced than ever before, with big changes happening at the drop of a hat.
Blink and you’ll miss it! The world of politics seems to be faster-paced than ever before, with big changes happening at the drop of a hat.
We are undoubtedly living in uncertain times that will be reflected in years to come. This generation has seen a global pandemic, the war in Ukraine, the death of our Queen, and extreme weather due to climate change and as if that’s not enough, we now have to navigate through a cost-of-living crisis and a crashing economy.
So let's take stock. Petrol and diesel prices have suddenly increased by 60%. Gas and electricity costs have increased by almost 200% and keep rising. Food and other essentials have become more expensive whilst wages have stagnated. We are all worse off than we were this time last year unless you are one of the lucky ones who are being helped by government measures to tackle the issue. But don’t celebrate too soon – there could be another u-turn lurking up ahead! Oh, wait… It just happened!
You could be forgiven for missing what has happened recently. So let's review what is going on.
The Government originally had a set of plans to increase the number of taxes and make some other changes. These plans were put in place by Chancellor Rishi Sunak, under PM Boris Johnson.
Then along came the cost of living crisis. Rishi Sunak and Boris Johnson were under pressure to solve the issue and both stepped down before any help was announced. The new Prime Minister, Liz Truss came along with her new Chancellor Kwasi Kwarteng and presented a help package in the form of a mini-budget. This help package involved holding off a lot of the tax rises and changes that Johnson and Sunak had originally planned to go ahead with. Global markets didn’t react well to this and Kwasi Kwarteng was swiftly replaced after just 38 days by an even newer, new Chancellor, Jeremy Hunt.
On 23rd September, the ‘new’ Chancellor Kwasi Kwarteng announced his help package in a ‘mini budget’, however, On 17th October, the current Chancellor Jeremy Hunt reversed most of it in a shock announcement.
The basic rate of income tax was cut from 20% to 19% in April 2023. (reversed by Jeremy Hunt) For higher earners, the additional income tax of 45% that applies to earnings over £150,000 was reduced. This means anyone earning over £50,270 would only pay 40% income tax. (reversed by Liz Truss)
The dividend tax was going to increase by 1.25% in April 2023, however, this tax increase had been scrapped. (reversed by Jeremy Hunt)
National Insurance was going to increase on 6th November by 1.25% for employees and employers, however, this increase had been scrapped. (retained by Jeremy Hunt)
The threshold where no stamp duty is payable was going to rise from £125,000 to £250,000. The current threshold of £300,000 was increased to £425,000. (retained by Jeremy Hunt)
Corporation tax was going to increase from 19% to 25% on profits exceeding £250,000 on 1st April 2023, however, this tax increase was scrapped by Kwasi Kwarteng. (reversed by Liz Truss)
The cap on bankers' bonuses had been scrapped. (retained by Jeremy Hunt)
Average household energy bills were to be capped at £2,500 for 2 years. (reversed by Jeremy Hunt)
Big changes are happing at Number 10 and 11, and who knows, we may even get a new Prime Minister... oh wait, that just happened!