This morning, the new Chancellor, Kwasi Kwarteng, held his first fiscal event which is being called a ‘mini-budget’. As part of his announcement, he repeated details already announced earlier this week and unveiled the new Government’s plans to boost the growth of the economy.
We’ve highlighted the main points announced today, which we will follow up in detail on Monday.
To help with soaring energy costs, various new measures were announced, including:
- Energy Price Guarantee (EPG)
- Energy Bills Support Scheme (EBSS)
- The Energy Bill Relief Scheme (EBRS)
- Energy Markets Financing Scheme
We’ve detailed what the first two mean here and will provide more detail in due course.
A range of tax cuts were announced, including:
- The planned increase to Corporation Tax is to be cancelled, it will remain at 19%.
- Annual Investment Allowance (AIA) to remain at £1m.
- The criteria of the Seed Enterprise Investment Scheme (SEIS) will now allow firms to raise £250,000 under the scheme – 66% more funding than previously.
- The Office of Tax Simplification (OTS) will be wound down.
- VAT-free shopping scheme for international tourists and a new modernised system.
- Alcohol duty will be frozen from February 2023.
- The health and social care levy rise will be cancelled – (the increase in National Insurance) from 6 Nov.
- IR35 rules to be simplified. The 2017 and 2021 reforms to IR35 will be repealed from 6 April 2023.
- Cancelling the increase in rate of Diverted Profits Tax, remaining at 25%.
- (England only) No stamp duty on first £250,000 (currently £125,000), 1st time buyers no stamp duty on first £425,000 (currently £300,000).
- (England only) From April 2023, the basic rate of Income Tax will be cut from 20p to 19p.
- (England only) From April 2023, the 45% top rate of tax (applies to those earning £150,000) will be scrapped. The top rate will be the 40% higher rate threshold.
There was also a lot of discussion on infrastructure, investment zones and plans that will be released later. The new UK Government made it clear that its focus in the medium term is growth and they released a Growth Plan document which can be found here.
We will have to wait and see how the Scottish Government responds in terms of Land and Buildings Transactions Tax (LBTT) and Income Taxes but in the meantime, we will release our commentary and summary of these announcements on Monday.
Should you wish to discuss your own circumstances, please get in touch with our EQ Taxperts.