Louise Burns-Lunt BFP FCA summarises the Chancellor’s his mini budget, with changes being made across a number of areas in an effort to stimulate the economy and assist individuals with the cost of living crisis.
There will be a cut in the basic rate of income tax from April 2023 to 19%. The Government estimates that this should mean 31 million people getting another £170 per year more in their pockets.
The higher rate of tax on earnings over £150,000 per annum of 45% has been abolished. So people earning over this amount will suffer tax at 40%. The average salary in the UK is £38,600.
The recent changes to National Insurance which saw a 1.25% uplift ringfenced for the NHS has been abolished from 6th November 2022. The Treasury claims that this will save approximately 28 million people an average of £330 per year. This will vary considerably based on earnings though, with those earning more benefitting considerably more than those on lower wages because of the National Insurance bandings.
The proposed rise in corporation tax in April 2023 from 19% to 25% has been abolished.
Jobseekers over the age of 50 are to be given extra time with coaches to learn new skills to assist with placing them in work.
Approximately 120,000 people on Universal Credit will have to perform further tasks to seek work, or face having their benefits reduced.
Work and investment
IR35 rules are to be simplified
Start-up companies and new companies are to be able to raise up to £250,000 under a scheme giving tax relief to investors
Share options for employees has doubled from £30000 to £60000
The stamp duty threshold has been raised to £250,000, and to £425,000 for first time buyers. The government claims that this will take 200,000 more people out of paying stamp duty.
There is to be a freeze on energy bills at £2500 for households, with qualifying households getting £400 to assist with their bills.
These will become unlimited with the cap being removed.
Planned increases in duties on beer, cider, wine and spirits have been cancelled
Infrastructure and investment zones
38 local areas are to be created and classed as investment zones. These will qualify for measures such as no business rates and no stamp duty.