Chancellor Jeremy Hunt revealed plans to reverse a number of proposed tax cuts during an emergency statement on Monday.
The MP has set out billions of pounds of savings to stabilise the public finances, with the Treasury saying the move - following talks over the weekend between Mr Hunt and Prime Minister Liz Truss - was designed to "ensure sustainable public finances underpin economic growth".
Among other huge motions, Mr Hunt confirmed he is ditching many of the measures in the mini-budget, including the planned cut to income tax. However, in a monumental change of policy, the Chancellor announced that help with energy bills for households will only last until April, with a review to find a "new approach" that will "cost the taxpayer significantly less".
READ MORE: Martin Lewis' warning to government as Jeremy Hunt scraps two-year energy price cap
Mr Hunt will also axe the planned cut to income tax, as well as reversing the freeze on alcohol duty rates. Here are what his new plans mean, and how much taxpayers could be worse off because of them.
Income tax
As it stands, the basic rate of income tax applies to earnings from £12,571 to £50,270 and is 20%. Previous plans to reduce this to 19% would mean the average basic rate taxpayer would be £130 better off in 2023/24, according to the Treasury.
Data from tax advisory firm Blick Rothenberg suggests that the 1% cut to the basic rate would save £124.30 a year for those on a salary of £25,000 and £224.30 a year for workers earning £35,000.
However, Mr Hunt has said this rate will stay at 20% "indefinitely" until the country's economy improves.
Energy bills help
The Prime Minister previously announced energy bills would be capped at £2,500 for the average household until 2024.
However, Mr Hunt today announced what was a two-year plan will now only last until April 2023. Campaign groups and industry organisations are warning ending the price guarantee considerably earlier could “heap huge financial pressure” on households.
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: "The country was already facing a financial cliff edge in April due to plans to end other support packages, but this cliff edge has now become even steeper.
"Without the energy price guarantee, the government will need to fundamentally reform the energy market alongside providing unprecedented levels of support for energy efficiency schemes and financial support for the most vulnerable. But any threat to people’s energy security is a threat to their health and wellbeing.
"If people cannot trust the government to deliver the support it has promised, what trust can anyone have that they will keep people warm this winter and beyond?"
Alcohol prices
Planned increases in the duty rates for beer, cider, wine and spirits will now go ahead, rather than being cancelled.
This move has been described as a "huge blow" for pubs still recovering from the pandemic, as well as trying to survive the cost of living crisis.
People can expect to pay an average of 7p more per pint of beer. Drinkers can also expect to pay an extra 38p for a bottle of wine, or £1.35 for a bottle of spirits.
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