[World Tax News] UK scraps all planned tax cuts
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- 2 Min Read
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- Last Updated on 27 October, 2022
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Editorial Team – [2022] 143 taxmann.com 333 (Article)
World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.
1. UK’s scraps all planned tax cuts
On 17th October 2022, the UK treasury chief abandoned almost all the tax cut plans announced by the Govt. in the mini-Budget. The Chancellor of the Exchequer announced that the following policies would no longer be taken forward:
(a) No reduction in the basic tax rate to 19% from April 2023
The basic tax rate shall not be reduced to 19% from April 2023. The basic rate will therefore remain at 20% indefinitely. It is further announced that the government aims to proceed with the cut in due course, and this will only occur when economic conditions allow and a change is affordable.
(b) The dividend tax rate shall be reduced by 1.25% from April 2023
The dividend tax rate shall be reduced by 1.25% from April 2023. This move will nullify the increase of 1.25%in the dividend tax rate, which took effect in April 2022.
(c) 2017 and 2021 reforms to off-payroll working rules to be repealed from April 2023
Off-payroll working rules apply when workers provide their services through an intermediary, usually the worker’s partnership firm or personal service company. Under these rules, income-tax and employee National Insurance contributions are deducted from the fees paid to the intermediary and such deduction is deposited with the Govt. The reform will remain in place until March 2023 and will be repealed from April 2023.
(d) VAT-free shopping scheme for non-UK visitors is withdrawn
VAT-free shopping was a scheme proposed by the government during the introduction of the Growth Plan 2022. This scheme was announced to provide tax-free goods from shops in Great Britain if delivered to any address outside the UK. The tax-free shopping scheme would have applied to the goods delivered from Northern Ireland to any country outside the UK and the EU countries. The Govt. has decided not to proceed with this scheme.
Source: UK Govt. website
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