Mini Budget Update 2022
London office, St Albans office
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Well, who would have thought that a few weeks into the Mini-Budget the UK government would make a complete U-turn? However recent events have been unprecedented. At the Mini-Budget on 23 of September the new Prime Minister Liz Truss and the newly appointed Chancellor Kwasi Kwarteng announced new economic policies that were focused on “The Growth Plan”.
Three weeks later, after much turmoil, most of the elements of the original plan have been reversed, with a new statement planned for 31 October. These revised changes outlined on 17 October are designed to ensure the UK’s economic stability and provide confidence in the government’s commitment to fiscal discipline. These updates are outlined below.
Mini budget updates include:
- The government has confirmed it will reverse the temporary increase in NICs from November and cancel the Health and Social Care Levy completely.
- Basic rate of income tax will remain at 20% indefinitely.
- The abolition of top rate of income tax of 45% will not proceed and will remain at 45%.
- Corporation tax will now increase to 25% by April 2023 for many businesses.
- SEIS investment raised to up to £250,000 with gross asset limit increased to £350,000 and the age limit from two to three years. The annual investor limit will also be doubled to £200,000 to support these increases.
- Stamp duty cut – stamp duty will not be paid on the first £250,000 of a property and the threshold for first time buyers will increase from £300,000 to £425,000, with a maximum cap to those eligible for First Time Buyer’s Relief pay, now increased to £625,000
- IR35 off-payroll working rules will remain in force.
- The dividend ordinary rate proposed reduction will not proceed. The rates will remain the same with ordinary rate of 8.75%, upper rate of 33.75% and additional rate of 39.35%.
- VAT Free shopping scheme for Non-UK visitors will not be introduced.
- Alcohol tax duty freeze will not go ahead.
- The previously announced Energy Bill Scheme and Energy Price Guarantee (EPG) will continue to support and protect households until April 2023 with a further review to be launched thereafter.
To find out more about the recently announced updates to the Mini-Budget read the complete guide by clicking the link below and Sign up to our newsletter to be updated with any further news.
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If you have any questions relating to any of the announcements covered in this update summary and how they may impact you and your business, please do not hesitate to contact us by completing the form below or get in touch with one of our tax experts.
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