Chris Sanger, EY’s Head of Tax Policy, comments on the emergency Budget:
“As fiscal events go, this was a seismic one. Although not formally a Budget, the statement includes many fundamental changes, from the abolition of the Health and Social Care Levy and the removal additional rate of income tax at 45p, first introduced by Gordon Brown at 50p in 2010, to the reversal of the legislated six percentage point increase in corporation tax.
“But beyond this, it also triggers a change in mindset. The reversal of the decision to deny VAT rebates for travellers leaving the UK, only implemented on leaving the EU, and the introduction of new super-powered special economic zone, reinforce the message that the UK wants to attract foreign direct investment and travellers. In essence, the Government is doubling down on growth, providing tax cuts across the board.
“Yet this is not all about the big tax rates; there are areas which have long been an area of contention. The IR35 changes that required businesses to enforce the tax rules on contractors are changing. However, given this is an area of concern, this may not be the last we hear on the topic.
“Whilst this may have been called a 'mini'-Budget, this was far more like a Rolls Royce.
“In practice, we will still have an economic statement later this year, but with the quantity of change announced today the Chancellor may well decide to move the Budget back to the Spring – yet another departure for Treasury Orthodoxy.”