AS PART OF the new government’s mini-budget, the UK chancellor Kwasi Kwarteng travelled back in time to reverse previously planned tax rises by announcing a raft of tax cuts, including a surprising removal of the 45% income tax rate.
We have highlighted the main points below:
Summary Budget measures
*****UPDATE****
IR35/Off-payroll working
Huge change here – the changes made to the off-payroll working rules from April 2017 and April 2021 will be reversed. From 6 April 2023 the responsibility for determining employment status will revert to the individuals doing the work.
- Income tax
- 45% Additional rate abolished (40% top rate now)
- Basic rate cut to 19% (from 20%)
- both to take effect from April 2023;
- dividend rate reduced (reversing previous hike)
- NIC – April 2022 increase in NIC reversed from 6 November and Health & Social Care Levy scrapped
- Corporation tax to remain at 19% – planned 2023 increase to 25% cancelled
- Off payroll working/IR35 – previous legislative changes to be repealed from April 2023
- Introduction of VAT-free shopping for overseas visitors
- New “Investment Zones” with enhanced tax reliefs and relaxed planning frameworks
- Removal of cap on bankers’ bonuses
- SEIS and CSOP limits to be increased. EIS and VCT reliefs will be extended beyond 2025
- Annual Investment Allowance to stay at £1m for capital allowances
- No stamp duty on first £250,000, for first time buyers that rises to £425,000 – comes into operation today
Our in-depth analysis of the Mini Budget will follow.