Mini-budget Statement September 2022 – An Overview
Key points from Chancellor Kwasi Kwarteng’s mini-budget statement, delivered this morning to MPs:
- The basic rate of income tax will be cut to 19p in the pound from 2023.
- The 45% higher rate of income tax for those earning more than £150,000 is to be abolished from April 2023. They will pay 40% tax.
- The 1.25% increase in national insurance introduced in April 2022 to fund health and social care to be reversed from November 2022.
Company Tax and Allowances
- The planned rise in corporation tax from April 2023 to 25% has been cancelled.
- The annual investment allowance for businesses will be permanently set at the level of £1 million from April next year. This will give 100 per cent tax relief to businesses on their plant and machinery investments up to the level of £1 million.
- The company share option plan limit that allows businesses to offer employees share options is being raised from £30,000 to £60,000.
- The seed enterprise investment scheme will now allow firms to raise £250,000 under the scheme: 66% more funding than previously.
- The IR35 reform will be repealed from April 2023.
- From April 2023, workers across the UK providing their services via an intermediary, such as a personal service company, will once again be responsible for determining their employment status and paying the appropriate amount of tax and NICs.
- Stamp duty to be cut immediately. Nothing will be paid for first £250,000 of property’s value (threshold increased from £125,000).
- The threshold for first-time buyers is to be increased from £300,000 to £425,000.
- The value of the property on which first-time buyers can claim relief is to also go up from £500,000 to £625,000.
VAT and Duty
- VAT-free shopping for overseas visitors will be introduced.
- The planned duty rises on beer, cider, wine and spirits are to be cancelled. Alcohol duty will be frozen from February 2023.
- Energy bills for households have been capped at an average of £2,500 a year for two years, a £1,000 saving at present energy prices.
- Bills have also been capped for six months for businesses, charities and public sector organisations such as schools and hospitals from October 2022.
- Total cost of the energy package, including business support, over next six months is estimated at £60bn.
- The Government will legislate to require trade unions to put pay offers to a member vote so that strikes can only be called once negotiations have fully broken down.
- Taxes to be cut for businesses in designated sites for 10 years to support investment, jobs and growth. The government is in talks with 38 local and mayoral combined authority areas in England to set up new investment zones.
- The cap on bankers’ bonuses is to be lifted.
- The Government will “accelerate reforms” to the pension charge cap.
If you need any further clarification on anything that’s been announced today, please contact our team today.
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