Chancellor Kwasi Kwarteng has today released details of the ‘mini-budget’, which he claims are the biggest tax cuts in a generation.
Our key points of the mini-budget are:
* Energy bill relief scheme for businesses
* Cut in the basic rate of income tax
* Higher rate of income tax scrapped
* Reverse in the recent rise in National Insurance
* Corporation tax rise cancelled
* IR35 rules to be simplified
* Annual investment allowance to remain
* Share options doubled
* Cut to Stamp Duty
The Chancellor kicked off the mini budget by reiterating the details of the Energy Price Guarantee and the Energy bill relief scheme for businesses which were previously announced. The Energy bill relief scheme for businesses will set the wholesale price of electricity at £211 per Megawatt and gas at £75 per Megawatt. This relief scheme will see energy bills for UK businesses cut by around half their predicted level this winter.
1p will be cut from the basic income tax rate in the pound from April 2023. This is one year ahead of the planned 2024 date. The 45% higher income tax rate has been scrapped for the taxpayers in England, Wales and Northern Ireland.
Class 1 and Class 4 National Insurance contributions will be reduced by 1.25% from November and cancelling the introduction of the Health and Social Care Levy as a separate tax from April 2023.
The planned Corporation tax rise from 19% to 25% in April 2023 has been scrapped.
The 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) will be repealed from 6 April 2023. From this date, workers across the UK providing their services via an intermediary, such as a Personal Service Company will once again be responsible for determining their employment status and paying the appropriate amount of tax and NICs.
The temporary £1 million level of the Annual Investment Allowance is permanent, instead of letting it fall to £200,000 after 31 March 2023.
From today, the Stamp Duty Land Tax that must be paid on purchasing residential properties in England and Northern Ireland is increased from £125,000 to £250,000. First-time buyer’s relief is increased from £300,000 to £425,000, and the maximum value of a property on which first-time buyers’ relief can be claimed will also increase, from £500,000 to £625,000.