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Fiscal Event September 2022 and its aftermath

Read ICAEW's analysis and reaction to the Chancellor's 23 September mini-budget and the new Chancellor's statement of 17 October, confirming plans to reverse most tax cuts and scale back energy price support.

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17 October update

On 17 October, the new Chancellor of The Exchequer, Jeremy Hunt, brought forward a number of measures from the late October Medium-Term Fiscal Plan. These reversed most of the changes that had been announced by his predecessor, Kwasi Kwarteng, on 23 September.

ICAEW analysis

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ICAEW Reaction

Mini-Budget almost entirely reversed

New Chancellor Jeremy Hunt cancels most tax cuts within the Budget, while also reducing the scope of the Energy Price Guarantee to six months.
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Tax

Chancellor statement: certainty on some mini-budget tax measures

New Chancellor Jeremy Hunt confirms off-payroll working will remain and that income tax rates will not change.
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Tax

Corporation tax rate to increase to 25% from 1 April 2023

Following news in October 2022 that the corporation tax rate will increase to 25% from 1 April 2023, the Tax Faculty has updated this article to reflect the confirmed increase in diverted profits tax and additional details have been provided on applying the profit limits and the rules for ring fence profits.
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Government business energy plan revealed

Businesses will automatically receive a reduction in energy costs from 1 October 2022.
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Tax

Chancellor scraps planned cut to 45% income tax rate
  • Article
  • 03 Oct 2022
The Chancellor has confirmed that the government will not proceed with abolishing the 45% income tax rate as first announced in the fiscal event of 23 September 2022.
Growth Plan 2022: investment zones
  • Article
  • 27 Sep 2022
The government announced that it will introduce investment zones across the UK as part of its plan for growth. Investment zones will benefit from tax incentives, planning liberalisation and wider support for the local economy.
Growth Plan 2022: 19% CT rate and £1m AIA from April 2023
  • Article
  • 27 Sep 2022
Chancellor Kwasi Kwarteng confirms that the corporate tax rate increase in April 2023 will be cancelled and that the temporary £1m annual investment allowance limit will become permanent.
The Growth Plan 2022: Chancellor extends reliefs and incentives for business investment
  • Article
  • 26 Sep 2022
EIS and VCT schemes extended and scope of SEIS and CSOP schemes widened.
The Growth Plan 2022: Income tax rate cuts to boost growth
  • Article
  • 26 Sep 2022
The new government’s mini-budget cuts headline income tax rates to support its pro-growth agenda, encourage spending and incentivise entrepreneurship.
The Growth Plan 2022: Au revoir OTS
  • Article
  • 26 Sep 2022
The Chancellor has announced that the Office for Tax Simplification (OTS) will be closed down, although two existing projects currently in progress will continue.
The Growth Plan 2022: Off-payroll working rules reversed from April 2023
  • Article
  • 26 Sep 2022
Workers providing their services via an intermediary are to regain sole responsibility for determining their employment status and paying the appropriate amount of tax and national insurance contributions under the IR35 rules.
NIC reversal leaves little time for employers and software developers, says ICAEW
  • Article
  • 23 Sep 2022
ICAEW’s Tax Faculty illuminates the practicalities behind reversing the 1.25 percentage point rise in national insurance contributions.

News and insights

Charity sector responds to mini Budget
  • Article
  • 05 Oct 2022
As the third sector braces itself for an increase in demand for services this winter, the recent fiscal event offers limited help to organisations but little for individuals in need.
Mini-Budget: some big wins for business, but growth scepticism
  • Article
  • 23 Sep 2022
Businesses welcome the cancellation of the Corporation Tax increase and measures to increase investment, but have doubts about the overall impact on economic growth.
Mini-Budget: bold but risky moves in bid to boost growth
  • Article
  • 23 Sep 2022
With a statement that was all about tax cuts, incentives and simplification, the Chancellor is taking a big gamble on accelerating growth
Interest rate rise ‘pushes us towards recession’
  • Article
  • 22 Sep 2022
The speed of inflation is putting the economy in a precarious position, says ICAEW’s Economics Director.
Leases on government balance sheet a drop in the ocean
  • Article
  • 21 Sep 2022
Public sector net debt on track to exceed £2.5trn by the end of the financial year, as £21bn of central government leases are brought onto the public sector balance sheet in August.
Business: energy plan “a sticking plaster on a bleeding wound”
  • Article
  • 21 Sep 2022
The energy discount for businesses has received a mixed response from members and companies, who welcome the support but question whether it’s too little, too late.
PwC: UK workers face £1,400 inflationary hit to wages
  • Article
  • 15 Sep 2022
UK workers braced for wages hit despite government plan to freeze household energy bills for two years, according to PwC.
August’s dip in inflation a ‘temporary distortion’, says ICAEW
  • Article
  • 14 Sep 2022
Latest official estimate revealed that UK inflation slowed to 9.9% in August, amid strong base effects and lower fuel prices.

The PM’s first 100 days: what needs to happen?

On the latest ICAEW Insights podcast, we discuss the economic challenges facing new Prime Minister Liz Truss, and the policy commitments made during the summer’s campaign trail.
Listen now
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Charts

Chart of the week: The IFS forecasts deficit
  • Article
  • 13 Oct 2022
Our chart this week illustrates how tax cuts, higher interest charges and energy support packages contribute to the Institute for Fiscal Studies forecast of big increases in the fiscal deficit over the next few years.
Chart of the week: Provisional tax bands 2023/24
  • Article
  • 29 Sep 2022
Our chart this week illustrates how five or seven different personal tax bands are expected in the coming financial year, despite the top rate of income tax being abolished.
Chart of the week: UK public debt
  • Article
  • 22 Sep 2022
We take a look at what makes up UK public debt and who it is owed to, before the Chancellor borrows hundreds of billions more in his emergency fiscal event.
Chart of the week: Receipts and spending by age
  • Article
  • 15 Sep 2022
Our chart this week looks at how receipts and spending vary by age, a key driver for public finances that new Chancellor Kwasi Kwarteng will need to factor into his fiscal plans.
Chart of the week: before the emergency fiscal event
  • Article
  • 08 Sep 2022
Our chart this week looks at how the budgeted deficit was supposed to play out according to the Spring Statement back in March, ahead of an emergency fiscal event expected within the next few weeks.

Energy crisis

A look at how supply difficulties, rising electricity prices and sanctions against Russia are contributing to turmoil in energy markets and what businesses can do to lessen the impact.
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Letters to the government

Letter from Michael Izza to Liz Truss on PM Election
  • 06 Sep 2022
  • PDF (610kb)
This is a letter written by ICAEW CEO Michael Izza to Liz Truss regarding her recent election to the position of Prime Minister.
Letter from Michael Izza to Kwasi Kwarteng on appointment as Chancellor of the Exchequer
  • 06 Sep 2022
  • PDF (611kb)
This is a letter from ICAEW CEO Michael Izza to Kwasi Kwarteng regarding Kwarteng's appointment as Chancellor of the Exchequer.

Insights Special: Inflation

A closer look at the impact of inflation on people, businesses, accountancy and the wider economy, bringing together the best expert opinion, data and analysis from ICAEW and its members.
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