Households face paying more in Income Tax and alcohol duty under a shake-up today by Chancellor Jeremy Hunt - with the future of energy bill prices also uncertain.
The new Chancellor today made a series of shock announcements that affect the money in all of our pockets.
Mr Hunt was parachuted into No11 to replace former Chancellor Kwasi Kwarteng on Friday.
The former Chancellor had announced a series of tax cuts in his Mini-Budget on September 23.
But the tax cuts promised in this Mini-Budget rattled markets so badly that the pound fell to record lows, threatened pension funds and led to mortgage deals being ramped up in price.
Today, Mr Hunt announced he was scrapping almost all of Mr Kwarteng's Mini-Budget proposals.
He has unveiled a new Tory programme to raise taxes - with the exception of National Insurance.
This is how the Chancellor's plans will affect what you pay in tax and for energy.
What it means for your income
The Chancellor has confirmed he will scrap plans to cut 1p from the basic rate of Income Tax.
The 1p cut to Income Tax was first announced by Rishi Sunak in March this year, with a view of it being put in place in 2024.
This measure was fast-tracked by Kwasi Kwarteng in his Mini-Budget last month, with the now ex-Chancellor pledging to bring this forward to 2023.
The announcement today by Jeremy Hunt means the 1p cut to Income Tax has been delayed "indefinitely".
You pay Income Tax on your earnings above a certain threshold.
It is charged on most types of income, including your salary and profits if you're a business owner.
Most people get a Personal Allowance of tax-free income - for the 2022/23 tax year, you can earn up to £12,570 before you start paying.
This means if you earn less than £12,570, you currently pay no Income Tax.
The majority of basic-rate taxpayers currently pay 20p in the pound on earnings between £12,571 and up to £50,270 - but this will drop to 19p from 2024.
Higher earners who have an income between £50,271 pay 40% income tax above this threshold, up to £150,000.
Any earnings above £150,000 are taxed at 45%.
But in better news, taxpayers will still pay less National Insurance (NI) from November 6 with a 1.25 percentage point cut still due to take place.
This means someone earning a salary of £15,000 would save £30 a year.
A worker earning £25,000 would pocket an extra £93, and someone on £35,000 would save £280 a year.
Investors in companies will also pay more tax from April 2023.
That is because Mr Hunt has scrapped plans to cut the tax on dividends.
Mr Kwarteng planned to cut the tax paid on dividends from 8.75% for basic rate taxpayers by 1.25 percentage points.
The same cut would have been applied to the 33.75% paid by higher-rate taxpayers and the 39.35% paid by additional-rate taxpayers.
What it means for the self employed
However, the Chancellor also had bad tax news for the self-employed.
This is because he said the Government would be sticking with despised changes to the IR35 tax system that mean the self-employed have higher tax bills.
Changes to IR35 were brought in in April 2021 which made contractors responsible for working out the employment status of freelance staff.
This led to higher tax bills for freelancers who had been self-employed.
Mr Kwarteng said from April 2023 freelance workers would go back to working out their own tax.
But that has now been dropped by Hunt, who said today: “We will no longer be proceeding with the reversal of off-payroll working reforms.”
What it means for your energy bills
Energy bills could rise next year as a current freeze on gas and electricity prices will be reviewed in April 2023 - 18 months early.
Today Mr Hunt said the Energy Price Guarantee, which "freezes" bills for the typical household at £2,500 a year, will be scaled back from April.
The Energy Price Guarantee was confirmed as a replacement for the Ofgem energy price cap.
It was announced to protect households from an energy bill rise of 80% from £1,971 to £3,549, which would have come into place in October.
The Energy Price Guarantee will no longer carry on being a universal help measure beyond this April.
It was originally meant to be in place for two years.
But in his announcement today, the new Chancellor said the Treasury will now "consider how to support households and businesses with energy bills after April 2023" as part of targeted measures.
What it means for price of alcohol
Brits face paying more for booze as Chancellor Jeremy Hunt scrapped a freeze on alcohol duty.
The changes are set to mean Brits will pay around 7p more, on average, for a pint of beer.
A pint of cider will go up around 4p, a bottle of wine 38p and a bottle of spirits £1.35.
Booze duty was due to be frozen for a year under plans announced by former Chancellor Kwasi Kwarteng in his Mini-Budget on September 23.
Mr Kwarteng's original plan was to freeze tax on booze from February 2023.
But the disastrous Mini-Budget led to financial chaos - and My Kwarteng being sacked.
Today Mr Hunt unravelled a number of Mr Kwarteng's plans, including the freeze to alcohol duty.
Before Mr Kwarteng stepped in, alcohol tax was due to go up by the retail prices index level of inflation - currently 9.9%.
