Last week, the Chancellor Kwasi Kwarteng unveiled his plan to help the UK people and businesses with the cost-of-living crisis. His mini budget has been brought forward in an effort to cut taxes and support ahead of the speculation that the winter months this year will be the hardest felt in generations.
So, what does his mini budget mean for us, and how will it impact you and your business?
Here’s a summary of the main points:
Income taxes will be reduced from April 2023 for both low and higher taxpayers in England, Wales, and Northern Ireland (Scotland has its own rates), the basic rate will be cut to 19% and there will be just one higher rate of 40%.
Corporation tax was due to increase from 19% to 25% in April 2023 this will no longer go ahead, this applies to the whole of the UK.
National Insurance was increased in April 2022 as part of the health and social care levy, this will be reversed from 6th November 2022.
IR35 rules will be reversed from April 2023 with the responsibility of employment status being transferred back to the contractor, who will assume the payment of tax. Businesses will still be exposed to tax risks were paying off payroll for those that should be taxed as employees.
Benefits rules will be tightened specifically around those who claim Universal Credits, and where job seeking commitments are not held. Additional time will be granted to over 50s to work with coaches in support of returning to work.
Investments: the allowance for companies to invest tax-free have remained at £1M indefinitely. Whilst the amount of share options open to employees to invest has doubled to £60k.
Stamp Duty has been cut meaning the new threshold is £250k and £425k for first time buyers.
Energy bills have been frozen ahead of the increased cap rate due in October.
Understandably, there is going to be a lot of panic out there as some people struggle to make ends meet. In our community, we share ideas and best practice, so if you’re not part of our Facebook group, you can join here. If you want to join our membership, click here.