Chancellor Kwasi Kwarteng presented his first Mini Budget on Friday 23 September 2022. He announced a series of tax cutting measures aimed at boosting growth.

A full summary of his announcements can be found in the link below. Highlights include:

National Insurance rise axed

• The increase in National Insurance will be reversed from 6 November 2022
• Primary Class 1 NICs (employees) will generally reduce from 13.25% to 12% and 3.25% to 2%
• Secondary Class 1 NICs (employers) will reduce from 15.05% to 13.8%

Income Tax cut

• Cut in basic rate of Income Tax from 20% to 19% will take effect from April 2023
• 45% Income Tax on earnings over £150,000 will be abolished
• Single higher rate of Income Tax of 40% will be charged on earnings over £50,271

Dividends tax rate cut

From April 2023:

• The dividend ordinary rate of 8.75% will reduce to 7.5%
• The dividend upper rate of 33.75% will reduce to 32.5%
• The dividend additional rate will be abolished
• As Corporation Tax due on directors’ overdrawn loan accounts is paid at the dividend upper rate, it will also reduce to a 32.5% charge for loans made on or after 6 April 2023

Business tax cut

Next year’s increase in Corporation Tax from 19% to 25% will be cancelled. It will remain at 19% for the majority of companies.

Stamp Duty Land Tax cuts

For transactions with effective dates on and after 23 September 2022 in England and Northern Ireland the following will apply:

• The residential nil rate tax threshold will be increased from £125,000 to £250,000
• The nil rate threshold for First Time Buyers’ Relief will be increased from £300,000 to £425,000
• The maximum amount that an individual can pay while remaining eligible for First Time Buyers’ Relief is increased to £625,000

There are no changes in relation to purchases of non-residential property.

Changes to IR35 and off-payroll rules

Off-payroll working rules from 6 April 2023 are to be repealed. From this date, workers providing their services via an intermediary will once again be responsible for determining their employment status and paying the appropriate amount of tax and NICs.

To read our detailed summary, please Click Here.

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