(announced on 23rd September 2022)
After a typical English batting collapse in strolls Kwasi Kwarteng, a thick plank of wood in hand ready to take one final “do or die” attempt at slogging his way to an innings-rescuing performance.
This is a budget that has split opinions. Brave and bold for certain but only time will tell whether this chancellor will be out “hit wicket” (that is out by his own hand) or lauded as the genius who dug us out of the hole we currently find ourselves in.
Key Headline Announcements
On Friday, 23rd September 2022, the Chancellor, Kwasi Kwarteng, delivered his Mini-Budget Statement. He unveiled what he claims are the biggest tax cuts in a generation.
While updates to the associated Treasury Direction and HMRC’s Guidance are awaited, the key updates are as follows:
National Insurance
- The 1.25% rise in National Insurance will be reversed from 6 November
- Workers and employers have paid an extra 1.25p in the pound since April
- New Health and Social Care Levy to pay for the NHS will not be introduced
Income Tax
- A cut in the basic rate of income tax to 19% from April 2023
- The government estimates that 31 million people will get £170 a year more
- Currently, people in England, Wales and Northern Ireland pay 20% on any annual earnings between £12,571 to £50,270 – rates in Scotland are different
- 45% higher rate of income tax abolished
- One single higher rate of income tax of 40% from April 2023
Corporation Tax
- Cancel the rise in corporation tax which was due to increase from 19% to 25% in April 2023
Stamp Duty
- The stamp duty threshold is to rise from £125,000 to £250,000, and for first-time buyers it will rise from £300,000 to £425,000, which comes into operation today
- 200,000 more people will be taken out of paying stamp duty altogether, the government claims
Benefits
- Rules around universal credit tightened by reducing benefits if people don’t fulfil job search commitments
- Around 120,000 more people on Universal Credit to be asked to take steps to seek more work or face having their benefits reduced
- Jobseekers over 50 to be given extra time with work coaches to help them return to the job market
Energy
- A freeze on energy bills, which the government claims, will reduce inflation by 5 percentage points
- The total cost for the energy package is expected to be around £60bn for the six months from October
Shopping
- VAT-free shopping for overseas visitors
- Planned increases in the duties on beer, cider, wine, and for spirits cancelled
Infrastructure and Investment Zones
- The Government is discussing setting up investment zones with 38 local areas in England
- Tax cuts and liberalised planning rules are to be offered to release land for housing and commercial use
- Investment zones offered measures such as no business rates and stamp duty waived
- New legislation to cut planning rules, and get rid of EU regulations and environmental assessments in an effort to speed up building.
Bankers’ Bonuses
- Rules which limit bankers’ bonuses scrapped
- Package of regulatory reforms to be set out later in the autumn
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
