Update: 17 October 2022
This morning, Jeremy Hunt has scrapped nearly all tax cuts announced in last month’s mini-budget, which include removing a proposed cut to corporation tax and a deferred 1p cut to income tax.
Here are some of the key points from the mini budget of 23 September 2022:
National Insurance
- In September 2021 the government announced its proposals for a UK-wide 1.25% Health & Social Care levy, which would be collected through the National Insurance system by 1.25% temporary increase for the year 2022/23 and from April 2023 be collected in its own right. However the Chancellor has announced in today’s budget that they will reverse the temporary increase in the National Insurance from November 2021 and cancel the Health and Social Care Levy, planed to come into effect from April 2023 completely. From November 2022 these will reduce back down to 12% and 2% for employees and 13.8% for employers.
- For self-employed (Class 4) this will be averaged across 2023/23, so the rates will be 9.73% and 2.73% and collected via your self assessment.
Income Tax
- A reduction of income tax from 20% to 19% from April 2023.
- Removing the higher tax rate of 45% – This was redacted 30 September 2022
Dividends
- A reduction of the dividends tax, back to what they we in 2021/22
- basic rate from 8.75% to 7.5%
- upper rate from 33.75% to 32.5%
- additional rate will be abolished – This was redacted 30 September 2022
Corporation Tax
- The previously announced increase form April 2023 will now not go ahead, leaving the rate of corporation tax at 19%.
Capital Allowances and reliefs
- Annual Investment Allowance will not be reduced in April 2023 as planned. It will become permanent and the proposed reduction will not occur, it will stay at £1 million.
IR35 and off-payrolling
- In today’s announcement the chancellor announced the repeal of the off-payroll working rules from 6 April 2023. From this date, workings providing their services via an intermediary will once again be responsible for determining their own employment states and paying the appropriate amount of taxes and National Insurance.
There is a further budget planned for 10 November 2022
This is meant as guidance only. No responsibility for loss occurred by any persons acting/refraining from action as a result of this information can be accepted by the Nicholson & Co (Sheffield) Ltd. It is always advisable to seek advice first.