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Published: 23/09/22 By:

Today (23rd September) the Chancellor, Kwasi Kwarteng, announced his mini budget focusing on economic growth. He declared that “Growth is not as high as it should be. This has made it harder to pay for public services, requiring taxes to rise, in turn higher taxes on capital, higher taxes on labour, have lowered returns on investment and work, reducing economic incentives and hampering growth still further. We are determined to break that cycle,” he states. “We need a new approach for a new era.”

The mini budget focused on three main points

  • To reform the supply side of the economy
  • A responsible approach to public finances
  • Tax cuts to encourage growth

The Chancellor began by declaring that the biggest challenge facing British people and businesses is the current volatile price of energy and recapped the new Energy Bill Relief Scheme announced by Business Secretary Jacob Rees-Mogg on 21st September (https://www.gov.uk/government/news/government-outlines-plans-to-help-cut-energy-bills-for-businesses).

Below are some of the highlights from the mini budget, more detail will follow in the next few days.

  • Stamp Duty Land Tax (SDLT) 0% threshold increased to £250k, 425k for first time buyers, with immediate effect
  • The cap on Bankers Bonuses will be scrapped in order to reaffirm Britain as a leader in the financial service sector
  • Legislation to require unions to put pay offers to a member vote to ensure strikes can only be called once negotiations have broken down.
  • Reduced benefits if people do not fulfil their job searching commitments
  • Reform the pension charge cap, so pension funds can invest more easily in UK assets
  • IR35 rules to be simplified and the reforms from 2017 and 2021 to be repealed

Business Tax

  • The planned increase of Corporation Tax has been cancelled meaning that the rate will remain at 19%
  • The Annual Investment Allowance will remain at £1m permanently to encourage investment
  • There will be tax cuts and incentives for businesses in designated tax sites yet to be announced

Personal Tax

  • The planned reduction in basic rate of income tax from 20% to 19% has been brought forward by a year and will now come into place from April 2023
  • The additional rate of income tax, currently 45% for earnings over £150k will be scrapped completely from April 2023
  • The recent 1.25% increase in National Insurance will be reversed from 6 November and the planned Health and Social care levy due for next April has also been cancelled

 

If you have any questions on the announcements, please contact us to discuss.

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