AFTER A DRAMATIC U-turn the Chancellor has decided to scrap the 45% tax rate. The move was widely criticised amid a cost-of-living and energy crisis and has gathered hugely negative momentum over the course of a few days.

At Shipleys Tax we have the latest on the mini-budget merry go round.

Turning point…

The Chancellor has confirmed that the tax cut will not go ahead, due to the distractions this policy has caused, reversing the announcement only made a few days ago to a lot of fanfare.

Now, from 6 April 2023 those earning over £150,000 will continue to pay the top rate of 45% income tax. However, due to other planned tax cuts, those with income over £150,000 will pay just 38.1% income tax on dividends from 6 April 2023 (currently 39.35%), meaning there will still be an incentive (albeit a smaller one) to delay dividends until on or after 6 April 2023.

The Chancellor is set to announce his medium-term fiscal plan on 23 November.