New chancellor, he’s still there – just about – only a couple of massive U-turns so far.
We’re not going to give our views on the latest updates, but with some big impacts for both businesses and individuals we thought we would summarise them here:
1) Corporation tax – The planned increases for 2023 have been shelved. Corporation tax will remain at a flat rate of 19%.
2) National Insurance and Dividend tax – The 1.25% increase for both National Insurance and Dividend tax rolled out at the start of this tax year will be reversed from 6th November 2022.
3) IR35 – The IR35 reforms introduced for the public sector (2017), and the private sector (2021) will both be reversed from April 2023. What does this mean? The decision around whether a contract is inside/ outside of IR35 will now move back to the contractor in all cases.
4) Stamp Duty Land Tax – The SDLT threshold will be increased from £125k to £250k. The threshold for first time buyers will also increase from £300k to £425k, and first time buyers relief will be applicable to properties worth up to £625k (up from £500k previously). These SDLT updates were all effective immediately.
5) Income tax – The basic rate will be reduced from 20% to 19% from April 2023 onwards. The additional rate of 45% for those earning above £150k was planned to be scrapped, however the government have done a U Turn on this now.
6) Energy Bills – These will be capped at £2,500 pr year, previously these were due to increase to £3,549 per year from 1st October 2022, then up again in January 2023.
7) Annual Investment Allowance – This will stay at £1m, it was due to decrease to £250k in April 2023.
Apparently there is more in pipeline, we await!