News
'Mini Budget' Summary
10 - 10 - 2022
What is included in the the Government's 'Mini-Budget'?
On
23 September 2022 the Chancellor of the Exchequer Kwasi Kwarteng announced a
set of new economic policies. The policies were not a budget statement although
the media has referred to them as a “Mini Budget”. We are still awaiting
another Autumn Statement in November 2022.
The
main policies announced are as follows:
National
Insurance
As
of 06 November 2022 Employees and Employers NI will revert to the pre 06 July
2022 percentages. The thresholds will not alter. This means that for the first
time in living memory the UK will have had 3 periods of differing National
Insurance:
|
|
06.04.2022
– 05.07.2022
|
06.07.2022
– 05.11.2022
|
06.11.2022
– 05.04.2023
|
|
Employees
NI |
|
|
|
|
Between
Primary and Upper Earnings Threshold |
12.00% |
13.25% |
12.00% |
|
Above
Upper Earnings Threshold
|
2.00% |
3.25% |
2.00% |
|
Employers
NI |
|
|
|
|
Above
Secondary Threshold |
13.00% |
15.05% |
13.00% |
|
|
|
|
|
Health and Social Care Levy
Due to be introduced from 06.04.2023 the 1.25% Health and Social Care Levy has been cancelled. The change is expected to be approved by the House of Lords on 17 October 2022.
Income
Tax
The
basic rate of income tax will be reduced from 20% to 19% from April 2023. This
is a year earlier than originally pledged by the previous Chancellor, Rishi
Sunak, in the Spring Statement.
There will be a four year transition period for Gift Aid relief which will remain at 20% until April 2027. Pension schemes offering relief at source will also benefit from a one-year transition period during which tax relief can still be claimed at 20%.
Initially
the additional income tax rate of 45% was to be abolished as at 06.04.2023. The
change has now been withdrawn and the 45% rate remains unchanged.
Dividend
Tax
Dividend
tax rates for 2023/24 will also fall by 1.25% reverting to the pre-2022/23
levels. From April 2023 tax on dividends above the £2,000 dividend allowance
will return to:
Basic
Rate: 7.5%
Higher
Rate: 32.5%
Additional
Rate: 38.1%
It
may, therefore, be tax efficient to delay receiving some dividend income until
2023/24.
Off–Payroll
Working
The
Off-Payroll Working administrative rules have been repealed. As of 06.04.2023
workers providing their services via an intermediary such as a Personal Service
Company (PSC) will once again be responsible for determining their own
employment status.
Corporation
Tax
The
01.04.2023 increase of corporation tax to 25% has been cancelled. The
corporation tax rate will remain at 19%.
Annual
Investment Allowance
The
Annual Investment Allowance expenditure limit was scheduled to decrease to
£200,000 at 01 April 2023. The decrease has been cancelled and the expenditure
limit of £1million will remain.
VAT
VAT
free shopping has been reintroduced for overseas visitors.
Stamp
Duty Land Tax (SDLT)
The
Stamp Duty Threshold above which SDLT must be paid when purchasing a
residential property has been increased from £125,000 to £250,000 with
immediate effect.
The
threshold at which first time buyers begin to pay SDLT on residential property
has been increased from £300,000 to £425,000.
The
maximum value on which first-time buyers relief can be claimed is increased
from £500,000 to £625,000.
Note
these changes apply to SDLT in England and Northern Ireland. Wales and Scotland
have Land Transaction Tax and Land and Buildings Transaction Tax respectively.
01244 625 500 or 01978 364 000
contactus@foremansllp.com
Whilst all due care and attention has been
taken in the preparation of these notes no liability
can be accepted for any omission or item
contained therein.
