Key points from today’s “mini-budget” announced by the new Chancellor of the Exchequer, Rt Hon Kwasi Kwarteng MP:

For Individuals

• A 1% reduction in the basic rate of income tax, planned for 2024, is being brought forward to 2023. In order to support charities, the Gift Aid claimable will remain at 20% until April 2027.
• The stamp duty (SDLT) threshold which was previously dropped to £125,000 is increased to £250,000 from tonight, with an increase from £300,000 to £425,000 for first time buyers.
• The 1.25% Health and Social Care Levy introduced from 6 April 2022 will be cut from November. The planned change to make this a stand alone health and social care levy has been scrapped.
• For those who pay Class 2/4 NI – this means that for 2022/23 a hybrid rate of 9.73% will apply, to reflect the short period where the 1.25% increase was in effect.
• The comparable 1.25% increase in dividend rates will be reversed from April 2023.
• The cap on bankers bonusses has been scrapped to ensure remuneration in London can compete against New York & Hong Kong.
• Changes in IR35 determinations – reverting it the sub-contractors being responsible determining their own status, rather than that being the responsibility of the contractor.

For Businesses

• The planned rise in corporation tax on a sliding scale from 19% to 25%, for companies with profits over £50,000, planned for April 2023 – has been scrapped. It is unclear whether this may lead to a reduction in the planned small profits rate of corporation tax for companies with profits under £50,000, although our advice is for all companies to expect the rate to remain at 19%.
• The 130% super-deduction on new plant and machinery will remain in place until March 2023.
• The £1 million annual investment allowance (AIA) limit for expenditure on new and second hand plant and machinery has now become a permanent limit, and will not be reduced to £200,000 as was planned to happen from April 2023.
• An increase in the company share option plan limit (which allows businesses to offer employees share options) from £30,000 to £60,000.
• A widening of the seed enterprise investment scheme (SEIS) from £150,000 to £250,000, making it easer for innovative young companies to raise the finance they need to grow and create jobs.

Duties, Growth & Other

• Energy costs are capped at £2,500 for an average household.
• Alcohol duty will be frozen from February 2023.
• Planned acceleration of around 100 large infrastructure projects, including transport, energy and digital schemes.
• Plans for new local “investment zones” with targeted tax cuts designed to increase productivity and create jobs. Detail on these is still unclear and is likely to vary from zone to zone.
• Plans to introduce minimum service levels, to limit the disruption caused by strike action, teamed with a requirement for unions to put all pay offers to a member vote – ensuring that strikes only happen once negotiations have genuinely broken down.

If there is anything else you would like to know, or if you would like more specific advice for your circumstances, please do get in touch!