On the 23rd of September 2022 Kwasi Kwarteng, the Chancellor, held a mini budget with the aim of encouraging growth in the economy. The main points were:
- Corporation tax will remain at 19% (Instead of increasing to 25% from 1 April 2023).
- The annual investment allowance will remain at £1m permanently (Instead of reducing to £200k from March 2023).
- There was no announcement about what will happen to the 130% super deduction, so it will presumably stop in April 2023, as previously scheduled.
- The basic rate of income tax will decrease from 20% to 19% from April 2023.
- The additional rate of income tax of 45% (On earnings over £150k) will reduce to 40% from April 2023. (Note that on 3 October 2022 there was a U-turn on this decrease, and the additional tax rate will remain 45%.)
- Additional rate tax will be abolished on dividends for additional rate taxpayers from April 2023. (Note that on 3 October 2022 there was a U-turn on this decrease, and additional tax will remain).
- The nil rate band for stamp duty will increase from £125,000 to £250,000.
- From April 2022 the Government introduced a 1.25% point increase in National Insurance contributions. Following this budget, the 1.25 percentage point rise in National Insurance contributions is being reversed from 6 November 2022.
- The 1.25% point increase in dividend rates will be reversed from April 2023.
For further information check out HMRC on https://www.gov.uk/government/news/chancellor-announces-new-growth-plan-with-biggest-package-of-tax-cuts-in-generations
If you’re looking for an accountant and want to see how the 23 September 2022 mini budget and growth plan will impact your business, please get in touch.