UPDATE 24/10/22: After causing turmoil in the markets, and costing the Chancellor and Prime Minister their jobs, the new Chancellor has reversed almost all tax measures previously announced. As things currently stand (but there seem to be changes faster than I can update this page) the plan is as below. Lets see if whoever is the next Prime Minister will come in and change things again!
Please speak to us if you want to find out the latest changes and how they might affect you.
———————————————-
You will no doubt be aware that Last Friday the Chancellor of the Exchequer, Kwasi Kwarteng, unveiled the Government’s Growth Plan, which includes a series of tax measures designed to tackle high energy costs, inflation and deliver higher productivity and wages.
On the face of it, it does seem like good news for our clients as the Government is clearly looking after businesses and high earners. However, unless you have been in hibernation since Friday you will have already seen some short-term effects of the plans and, so far, it seems to have weakened the pound and will probably exacerbate inflation.
In the medium to long term the Government hopes it will kickstart the economy and make the UK an attractive place for investment and business by making it cheaper and easier to conduct, in the hopes that the taxes will follow.
Normally, reducing taxes would be a popular policy, but following hard on the heels of an expensive lockdown most are wondering where the money will come from to fund it. It remains to be seen whether the Government’s gamble will pay off. It’s going to be interesting to find out!
Key tax measures announced include:
- planned corporation tax rise cancelled, keeping the rate at 19% from April 2023; UPDATE: It will go up to 25% for profits over £250k in April 2023 after all. Under £50k profit it will still be at 19%. Marginal rate in between.
- basic rate of income tax to be reduced to 19% from April 2023, one year earlier than previously announced; UPDATE: It will stay at 20%.
- increased Stamp Duty Land Tax (SDLT) thresholds designed to help boost the property market;
- new Investment Zones to benefit from tax incentives;
- Annual Investment Allowance (AIA) threshold permanently set at £1m, rather than reverting to £200,000 as was originally planned for April 2023;
- reversal of dividend tax and NIC increases and cancellation of Health and Social Care Levy; UPDATE: National Insurance rise scrapped, but higher rate of dividend tax will stay.
- plans to abolish the IR35 off–payroll working rules for the public and private sector from April 2023. It will revert to the original legislation where the onus is on the individual to report their income correctly; UPDATE: It wont revert and will carry on as normal.
- an expansion of the Seed Enterprise Investment Scheme (SEIS) to help more UK start-ups raise higher levels of finance – doubling the annual investor limit to £200,000, increasing the gross asset limit to £350,000 and making it easier for investors to claim tax reliefs, due to come into force from 6 April 2023; and
- freezing alcohol duty for a further year. UPDATE: Scrapped
UPDATE: The government had announced plans to scrap the 45% additional rate tax from April 2023, but they have now backed down on that unpopular idea.
If you would like to discuss how any of the measures affect you personally, please feel free to contact us at: enquiries@tenforwardfinance.co.uk or call us on 020 8446 6112
For a more in-depth guide, with rates and amounts, please visit here (now out of date): https://www.tenforwardfinance.co.uk/2022/09/25/a-simple-guide-to-the-mini-budget-2022-the-growth-plan/
And here: https://www.tenforwardfinance.co.uk/2022/09/25/stamp-duty-land-taxes-uk-autumn-mini-budget-2022/
Please note, data correct at time of writing and may not always be applicable to your circumstances. Please check with us before acting on any of the above as we cannot be held responsible for any action taken without giving formal advice.
