Mini-budget announced by the Chancellor of the Exchequer 23/9/22

The new Chancellor delivered his first mini-budget, which he advises is to simplify the tax system – a summary of the changes that will affect business owners and their employees are below – further details will be advised in due course.

Mini-budget Summary

Health & Social Care Levy – of 1.25% due to be introduced in April 2023 has been scrapped.

National Insurance Contributions – the 1.25% uplift that was introduced in April 2022 will end on 06 November 2022.

Income Tax – There will be a 1% cut to the basic rate of income tax from April 2023, bringing this down to 19% and the abolition of the 45% rate of income tax for higher earners.

Dividends – The dividend tax increase of 1.25% will be abandoned with ordinary and upper rates of dividend tax set to be reduced to 2021-2022 levels (7.5% and 32.5% respectively) from April 2023.

Corporation Tax – The planned increase of corporation tax from 19% to 25% has been cancelled.

IR35 / Off-Pay Working – the rules introduced in 2017 and extended in 2021 are to be repealed with effect from April 2023 (more details to follow once detail has been released)

Annual Investment Allowance – will be set to £1 million

Seed Enterprise Investment Scheme (SEIS) – which enables start-ups to raise funds has doubled its annual investor limit to £200,000 from April 2023

Company Share Option Plan – increasing the employee share option limit from £30,000 to £60,000 and removing a condition which limits the types of shares eligible for inclusion within the scheme, both due to take effect from 6‌‌‌ ‌‌April 2023.

Should you have any questions with regards to any of the changes announced so far, please feel free to get in touch.