Today we saw the Chancellor Kwasi Kwarteng outline a series of tax cuts and economic measures in order to shake up the UK’s finances in the form of a mini-budget. Below we have pulled together the key announcements from the budget and we will shortly follow with an in-depth guide on the impacts and changes…
The basic rate of income tax has been cut to 19% from April 2023.
The tax rate for higher earners of 45% has been abolished and replaced with a 40% top tax rate.
This has been raised to £250k and for first time buyers to £425k.
The planned rise to 25% for next year has been scrapped, it will remain at 19%.
The increase that came into effect has been reversed.
Discussions with 38 Local Authorities to establish local investment zones in the UK.
These zones will encourage rapid development and business investment offering lower taxes, 100% business rates relief on newly occupied premisses and certain businesses where they expand, enhanced capital allowances for companies’ qualifying expenditure on plant and machinery assets for use in tax sites, NI relief for salaries up to £50,270, enhanced structures and buildings allowance and full SLDT relief for land and buildings bought for use or development for commercial purposes.
VAT free shopping for all overseas visitors.
Repeal of IR35
Currently this mean that where the tax law required the employer and not the contractor to decide if the working relationship was going to be as a self-employed contractor or an employee.
From April 2023, this reform is to achieve a simpler system to remove unnecessary costs for businesses.
This will mean workers will once again be responsible for determining their employment status and it will be their responsibility for paying the appropriate amount of tax and NI contributions.
The energy price guarantee means that, and average household will pay no more than £,500 per year for a period of two years from October 2022.
£400 support for all households to receive through the Energy Support Scheme over the winter months.
The government will also provide an additional payment of £100 to compensate for the rising costs of alternative heating fuels for UK households who are unable to receive support for heating costs through the Energy Price Guarantee.
From April 2023, companies will be able to raise up to £250,000 of SEISS investment, a two-thirds increase.
From April 2023, qualifying companies will be able to issue up to £60,000 of CSOP options to employees, double the current £30,000 limit.
Over the coming days, we will take the time to fully understand the outcome of today’s mini-budget and the impact that it will have on you and your business. Come back next week to download your free Mini-Budget guide in our resources section here.
With the changes to IR35 having such an impact, Adam Truluck, our Tax specialist, will provide his expert opinion on what these changes mean early next week.