Following Kwasi Kwarteng’s mini budget statement, which included some of the biggest tax cuts in nearly half a century, Tom Moore, Chartered Tax Advisor, outlines some of the key takeaways from the chancellor’s announcement:
- The National insurance rise we saw earlier this year is being reversed from 6th November 2022.
- The health and social care levy which was due to come in from April 2023 has now been scrapped.
- The rise in tax rates on dividend income, which were linked to the rise in National Insurance rates, will also be reversed.
- Corporation tax rise to 25% from April 2023 has been cancelled and instead it will remain at the current rate of 19%.
- The basic rate of income tax will be reducing from 20% to 19% from April 2023. This is a year earlier than planned.
- The annual investment allowance for capital allowances will not be cut as planned, which will enable 100% relief on up to £1million of investment by businesses each year.
- The Chancellor promised reform of the “IR35” tax rules for the self-employed, which can result in them being taxed as if they were employees. Reforms to the system introduced in 2017 and last year will be scrapped.
- The chancellor confirmed almost 40 investment zones will be created with tax breaks for businesses. The government is working with areas including the Tees Valley, West Midlands, Norfolk and the west of England to establish investment zones.
- Changes to Stamp Duty Land Tax. To read more about this click here.
