The new Chancellor Jeremy Hunt has today ditched the majority of measures announced in the disastrous Mini-Budget in an attempt to bring financial stability to rattled markets.
Some of the measures thrown out include a 1p cut to Income Tax, which will now be delayed “indefinitely” instead of coming into place next year, while corporation tax will now rise from 19% to 25% as planned.
Mr Hunt will also do away with plans to scrap controversial IR35 tax reforms, in a blow for the self-employed, and alcohol prices could now rise next year after he confirmed a duty freeze won’t go ahead.
In an unexpected announcement, the Chancellor also said the Energy Price Guarantee will now be scaled back from April.
It is expected that targeted help will instead be given to those who need help paying bills, rather than the scheme running universally for two years.
A Treasury review will decide exactly who'll be eligible and for how much.
But the cut to National Insurance contributions - which will be reduced from 13.25% to 12% in November, will still go ahead - as will a cut to stamp duty, which saw the threshold for when you start paying land tax rise from £125,000 to £250,000 (or £425,000 if you’re a first-time buyer).
Mr Hunt said all the changes will save the public purse £32billion a year. But how exactly does it affect you?
The Mirror has designed a special Mini-Budget changes calculator so you can check the direct impact on your salary and finances.
Here are some of the changes the calculator covers:
Income Tax
Income Tax 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.
This was meant to drop to 19p in 2023 - but this change now won't go ahead.
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%.
National Insurance
National Insurance is a tax on earnings, paid by both employed and self-employed workers.
You pay NI over a certain earnings threshold, with it counting toward your benefit entitlement and state pension in later life.
The rate of NI contributions you pay is being cut from 13.25% to 12% from November 6.
The 1.25 percentage point hike was introduced to pay for health and social care.
If you have an employer, or you're self-employed but work for an employer, you'll pay Class 1 contributions.
The amount you pay in NI is then worked out based on your on gross earnings, before tax or pension deductions, above certain thresholds.
You start to pay NI when you earn above £12,570.
When the reversal comes into play, you’ll pay 12% on earnings between £12,570 and £50,270.
You currently pay 3.25% on earnings over £50,270 but this will drop to 2%.
Energy bills
The Energy Price Guarantee will be scaled back from April instead of lasting two years for every household.
The landmark scheme was confirmed as a replacement for the Ofgem energy price cap and "freezes" energy bills at £2,500 a year for the typical household.
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.
But much like the price cap, the Energy Price Guarantee isn't a total cap on your energy bill.
What the Energy Price Guarantee does is cap the unit rates you’re charged for gas and electricity, plus the standing charges.
This means if you use more energy, you could end up paying more than £2,500. Similarly, use less energy and your bill should be less.
It comes in addition to an automatic £400 energy bill discount that millions of households started to receive this month, paid out in six instalments to further reduce financial strain.
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" with targeted measures.
The Government hasn't said how it will decide who gets the targeted energy support, or if the headline figure of £2,500 a year will stay the same.
