Another ‘mini-budget’, introduced by Jeremy Hunt

Another ‘mini-budget’, only 3 weeks since the previous one was announced, has been put in place by the new chancellor, Jeremy Hunt, who has reversed ‘most’ of the tax measures introduced by the previous chancellor only last month.

The updated list is below;

National Insurance Contributions

The 1.25% uplift that was introduced in April 2022 will end on 06 November 2022. This remains unchanged and will therefore go ahead. The Health and Social Care Levy has also been scrapped which was due to start in April 2023.

Income Tax

The changes to income tax which were announced in the previous budget have all been reversed, therefore the basic rate of income tax will remain at 20%  and the ‘cut’ has been put on hold indefinitely. (Rates in Scotland are different). The change to lowering the additional rate income tax has also been reversed and will no longer go ahead.

Dividends

The dividend tax will remain as before the mini-budget with the basic rate being 8.75%, the higher rate 33.75% and the additional rate of 39.35%

Corporation Tax

The planned increase in corporation tax will now go ahead with the rate increasing from 19% to 25% in April 2023.

IR35 / Off-Pay Working 

The rules introduced in 2017 and extended in 2021 are to continue as before and no changes will be made to this position.

Annual Investment Allowance 

Will be set to £1 million, this was not changed in the 17 October budget, so will remain in place.

Seed Enterprise Investment Scheme (SEIS)

Which enables start-ups to raise funds has doubled its annual investor limit to £200,000 from April 2023, this was not changed in the budget of 17 October, so will remain in place.

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, was not changed in the mini-budget of 17 October 2022, so this will remain in place.

What does this all mean for businesses?

Many of the landmark changes announced in the mini-Budget in September by the former chancellor, Kwasi Kwarteng have been overturned as the government seeks to stabilise the markets.

However, some aspects have remained, such as the now-permanent Annual Investment Allowance, which offers a generous capital expenditure boost for businesses looking to grow.