On 23rd September the new Chancellor Kwasi Kwarteng delivered the new gorvernment's "Growth Plan", pledging to "turn the vicious cycle of stagnation into a virtuous cycle of growth". Containing the largest tax cuts in more than fifty years and a raft of additional spending, the new Prime Minister and her Chancellor aim to tackle the immediate economic challenges facing the UK, focusing on three main priorities:
- reforming the supply side of the economy
- maintaining a responsible approach to public finances
- cutting taxes to boost growth
With a variety of tax cuts and/or the scrapping of planned tax increases, the emergency measures introduced in the mini-budget are certainly friendly to businesses and high earners. Key points announced include:
- The planned increase in corporation tax rates from 19% to 25% has been scrapped;
- The 1.25% increase in national insurance rates introduced at April 2022 has been scrapped from 6 November 2022;
- The 45% additional rate of tax on earned income scrapped from April 2023;
- The 38.1% additional rate of tax on dividend income scrapped from April 2023;
- Planned reduction in the Annual Investment Allowance from April 2023 scrapped, it will now be set at £1m permanently;
- Creation of new low tax investment zones across England, Wales and Northern Ireland and discussions to be held with Scottish Government over similar zones in Scotland;
- Off payroll working rules introduced to reform IR35 in 2017 and 2021 to be scrapped, placing the burden back on contractors to ascertain their employment status rather than on the end client;
- Energy price cap for businesses for six months;
- Stamp Duty Land Tax threshold to be increased to £250,000 in England and first time buyer threshold increased to £425,000.
To read our 2022 Mini-Budget Report, be sure to download your copy below.
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