Chancellor’s Economic Briefing Update

1. Introduction
2. Income Taxes & Allowances
3. National Insurance Contributions Thresholds And Rates
4. Corporation Tax
5. Other

Introduction

On 17 October 2022, the Chancellor Jeremy Hunt, delivered a briefing on the update of the Mini Budget that was delivered on 23^rd September 2022. We’ve made a summary of the key measures impacting small, limited companies and individuals.

Income Taxes And Allowances

• The Basic rate of income cut to 19% that was scheduled to come into effect from April 2023 has been scrapped. The Basic rate of income tax will remain at 20%
• The 45% higher rate tax rate will remain in place
• There will be a reversal of the dividend tax cuts from April 2023
  • The basic rate dividend tax will remain at 8.75%
  • The higher rate dividend tax will remain at 33.75%
  • The Additional rate dividend tax will remain at 39.35%

National Insurance Contributions Thresholds And Rates

• The changes in National insurance as stated below remain
  • The rise in National Insurance Contributions (NICs) rate of 1.25% which was introduced on 6 April 2022 will be reversed from 6 November 2022.
  • Adjustment to the NICs rate will be made via employer’s payrolls.
    • From 6 November 2022, the previous 2021-22 NICs rates of 12% and 2% will apply, with an employer’s rate of 13.8%.
  • There are no changes to the increased NICs thresholds, introduced in July 2022.

Corporation Tax

• The planned increase in corporation tax from April 2023 will go ahead.
• This means the rate of Corporation Tax will increase from 19% to 25% from April 2023 for firms making more than £250,000 profit.

Other

• The cuts in Stamp Duty land tax will remain.
  • The limit is raised to £250,000 or £425,000 for first-time buyers.
  • First-time buyers will also be able to claim tax relief on the first £625,000 of their new homes.
• The Energy Price Guarantee will run from October 2022 – April 2023.
• The planned duty rates increase on beer, wine and spirits will go ahead as previously communicated
• VAT-free shopping for overseas visitors due to be implemented in April 2023 will be scrapped.
• Capital allowances Annual investment allowance will remain at £1million.
• There will be an increase in limits for the Seed Enterprise Investment Scheme (SEIS) from April 2023
  • Companies will be able to raise up to £250,000 of SEIS investment. The current limit is £150,000
  • The gross asset limit will be increased from £200,000 to £350,000 and the trading time limit from two to three years
  • The individual annual investor limit of £100,000 will be doubled to £200,000
• IR35 reforms that were due to be scrapped in April 2023 will now remain
  • This means that employers will remain responsible for ensuring that agency workers who provide their services through a company pay appropriate levels of tax.