An average UK earner on a £30,000 salary will lose a £174 boost that would have come next year if plans to cut the basic rate of income tax to 19% had gone ahead, according to analysis. However, they will still be around £218 better off due to the scrapping of the 1.25 percentage point increase in national insurance (NI), which has been kept in place, according to wealth managers Quilter.
The Government had been set to cut the basic rate of income tax to 19% from April 2023. But now, among a range of policies previously announced in the mini-budget which will no longer be taken forward, the basic rate of income tax will remain at 20% indefinitely, until economic circumstances allow for a cut.
Mr Hunt also announced that the energy price guarantee, which keeps gas and electricity bills in check, will end in April next year rather than being in place for two years - meaning your bills are likely to go up next spring.
