Kwasi Kwarteng announced the Government’s “mini-Budget” today. Some of the changes had been widely trailed as part of the Conservative Party’s leadership election but some unexpected tax cuts were also revealed. Here are some initial headlines:
- The 45% income tax rate for those earning over £150,000 will be abolished from April 2023, so the top rate of income tax will be 40% again.
- The basic rate of income tax will be cut by 1% to 19% from April 2023 (one year earlier than previously announced).
- The planned rise in corporation tax from 19% to 25% in April 2023 will be cancelled.
- Employees’ and employer’s NICs will be reduced by 1.25% from November (reversing the recent NICs rise) and the proposed introduction of the 1.25% Health and Social Care Levy as a separate tax from April 2023 will be cancelled.
- The reforms made in 2017 and 2021 to the off-payroll working rules (also known as IR35) will be repealed from April 2023. Workers providing their services via an intermediary will once again be responsible for determining their employment status and paying the appropriate amount of income tax and NICs.
- The threshold above which SDLT must be paid on the purchase of residential properties in England and Northern Ireland is increased today from £125,000 to £250,000. The threshold at which first-time buyers begin to pay residential SDLT will increase from £300,000 to £425,000 and the maximum value of a property on which first-time buyers relief can be claimed will increase from £500,000 to £625,000.
- EIS relief will be extended beyond its current 2025 sunset clause.
- From April 2023, companies will be able to raise up to £250,000 of SEIS investment rather than £150,000. The gross asset limit will be increased from £200,000 to £350,000 and the age limit increased from two to three years. The annual investor limit will be doubled to £200,000.
- From April 2023, qualifying companies will be able to issue CSOP options over shares with a value of up to £60,000 to employees which doubles the current £30,000 limit. Restrictions on share classes allowed within CSOP will be relaxed, aligning the scheme rules with the rules in the EMI scheme.
- The cap on bankers’ bonuses will be removed (which currently limits bonuses to twice the level of salary).
You can read the Growth Plan in full here: