Today the Chancellor, Kwasi Kwarteng, delivered his first mini Budget.
Named The Growth Plan the budget is believed to be the biggest tax cuts in a generation. We have summarised the key points below.
Income tax
- Cut in basic rate of income tax from 20% to 19% from April 2023. Currently, people in England, Wales and Northern Ireland pay 20% on any annual earning between £12,571 to £50,270
- 45% higher rate of income tax abolished, leaving one single higher rate of income tax of 40% from April 2023
National Insurance
- Reverse recent rise in National Insurance (NI) from 6th November
- Since April 2022 workers and employers have paid an extra 1.25p in the pound
- New Health and Social Care Levy to pay for the NHS will not be introduced
Corporation tax
- Cancel rise in corporation tax which was due to increase in April 2023 from 19% to 25%
Benefits
- Rules around universal credit tightened, by reducing benefits if people don’t fulfil job search commitments
- More people on Universal Credit to be asked to take steps to seek more work, or face having their benefits reduced
- Jobseekers over 50 to be given extra time with work coaches to help them return to job market
Work and investment
- IR35 rules – the rules which govern off-payroll working – to be simplified
- Annual investment allowance to remain at £1m indefinitely
- Regulations change so pensions funds can increase UK investments
- New and start-up companies able to raise up to £250,000 under scheme giving tax relief to investors
- Share options for employees doubled from £30,000 to £60,000
Stamp duty
- From today no stamp duty on first £250,000 and for first time buyers that rises to £425,000
Energy
Bankers’ bonuses
- Rules which limit bankers’ bonuses are to be scrapped
Shopping
- VAT-free shopping for overseas visitors
- Planned increases in the duties on beer, for cider, for wine, and for spirits cancelled
Contact us if you’d like to discuss any of the above and how it impacts you and your business.
