Following the response to the Mini-Budget, there has been pressure to make changes.
Jeremy Hunt took over as the new chancellor and issued an Emergency Statement that reversed a lot of the mini-budget measures.
The tax changes are summarised below:
Income Tax
The 1% reduction in the basic rate to 19% from April 2023 has now been delayed indefinitely.
The additional tax rate of 45% remains in place (this was originally scrapped in the Mini-Budget and reinstated by the previous Chancellor).
The proposed reduction of 1.25% in the tax rate for dividends from April 2023 will not take place.
National Insurance
The National Insurance increase in April 2022 of 1.25% will be reversed, effective from 6 November.
Corporation Tax
The planned increase in the main rate of Corporation Tax from 19% to 25% from 1 April 2023 which was cancelled in the Mini-Budget will now remain in place. The annual investment allowance of £1m will also remain in place.
Stamp Duty Land Tax
The SDLT nil-rate band doubles to £250,000 and first-time-buyers’ nil-rate band increases from £300,000 to £425,000 applying to properties with a value up to £620,000 (increased from £500,000). These changes remain in place.
Off-payroll working (IR35)
The off-payroll working reforms introduced in 2017 and 2021 were going to be repealed from April 2023. This has been reversed, so businesses of a certain size making payments to personal service companies will remain responsible for assessing employment status and paying the appropriate amount of tax and NICs.
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Please contact us to find out how the above applies in your circumstances and how you can reduce your tax liabilities and maximise your tax efficiency.
Please note that the above is for general information only and does not constitute financial or tax advice. You should not rely on this information to make or refrain from making any decisions. You should always obtain independent professional advice in respect of your own situation.
