Key Takeaways from the Mini-Budget 2022

The new Chancellor of the Exchequer announced his mini-budget on 23 September, here are some key takeaways that may be relevant to you and your business.

Corporation Tax

The planned increase in April 2023 to the corporation tax rate (ranging from 19% to 25%) for companies with profits from £50,000, up to, and above £250,000 has been canceled. It will remain at the rate of 19% for most companies.

Capital Allowances

The Annual Investment Allowances (AIA) will remain at £1 million. It was scheduled to revert to £200,000 in March 2023. To this limit, businesses will continue to receive 100% tax relief on plant and machinery investments.

Income Tax and NI

The basic rate of Income Tax will be reduced to 19% in April 2023, and the additional 45% rate will be scrapped.

The recent 1.25% temporary increase in National Insurance contributions will be reversed from the 6th of November. The 1.25% Health and Social care levy scheduled from April 2023 will also be scrapped.

Income Tax on dividends will also be cut back to 7.5%, 32.5%, and 38.1% for Basic, Higher, and Additional Rate taxpayers, respectively.

Stamp Duty

The devolved parliaments in Scotland and Wales will make their own decision on whether they will wish to make changes similar to those made in England (outlined below).

The nil rate band has been doubled from £125,000 to £250,000. First-time buyers will pay no stamp duty up to £425,000, and the value of the property on which first-time buyers can claim relief increases from £500,000 to £625,000.

Pensions

Pension providers can continue to claim at 20% for all their members for the tax year 2023/24. From 2024/25 onwards, systems will need to be updated to be able to claim at the relevant basic rate of income tax for members.

Additional information: Energy Bill Relief Scheme

A scheme has been introduced to provide energy bill relief for business customers between 1 October 2022 and 31 March 2023

Eligible businesses will see the wholesale element (the price the energy provider pays) of their bill capped. The cap stands at £0.211/kWh for electricity and £0.075/kWh for Gas. The final per unit price paid could be higher to reflect other costs such as network charges and operating costs. As of writing, no action is needed to benefit from this scheme.

Read more on the Energy bill relief scheme here. https://www.gov.uk/guidance/energy-bill-relief-scheme-help-for-businesses-and-other-non-domestic-customers

This information is subject to change and is not professional advice. Refer to our disclaimer for more details.

Mini-Budget 2022: Key Takeaways