17 October 2022
The then Chancellor announced a mini budget on 23 September 2022. Since then there has been a new Chancellor and a new Prime Minister. This article provides a summary of the initial measures, and details what has subsequently been reversed, up until the end of October 2022. Further changes are expected in the Chancellor’s statement on 17 November 2022.
More details on the key announcements are as follows:-
- The planned 1% cut in income tax to 19% from 6 April 2023 has been reversed. The basic rate of income tax will remain at 20% indefinitely.
- The four-year transitional period for Gift Aid relief, to maintain the income tax basic rate relief at 20% until April 2027, will no longer be applicable.
- There has been a reversal on the original announcement that the 45% income tax top rate was to be abolished and replaced with a single top rate of 40% from 6 April 2023. The 45% income tax top rate on annual income above £150,000 will now remain and not be replaced.
- From 23 September 2022, the government will increase the threshold above which Stamp Duty Land Tax (SDLT) must be paid on the purchase of residential properties in England and Northern Ireland from £125,000 to £250,000. The government will also increase the relief that first-time buyers can receive. From 23 September 2022, the threshold at which first-time buyers begin to pay residential SDLT will increase from £300,000 to £425,000 and the maximum value of a property on which first-time buyers relief can be claimed will also increase from £500,000 to £625,000.
- The planned increase in the corporation tax rate to 25% from 1 April 2023 will now go ahead as originally planned.
- The Prudential Regulation Authority will remove the current cap on bankers’ bonuses. This cap limits the remuneration of certain bank staff to 100% of their fixed pay.
- Reversal of the 1.25% increase in National Insurance for employees, employers and the self-employed from 6 November 2022.
- The 1.25% increase to the rate of income tax on dividends which took effect in April 2022, will now remain in place. The ordinary and upper rates of dividend tax will remain at levels of 8.75% and 33.75% respectively.
- The new Health & Social Care Levy to pay for the NHS will not be introduced. This was due to come into force as a separate tax from 6 April 2023.
- The 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) will now remain in place.
- The planned duty rates freeze on beer, wine and spirits from 1 February 2023 has been reversed.
- Reform to the pension charge cap. The government propose to bring forward draft regulations to remove well-designed performance fees from the occupational defined contribution pension charge cap.
- Seed Enterprise Investment Scheme (SEIS) – From April 2023, companies will be able to raise up to £250,000 of SEIS investment, a two-thirds increase. The gross asset level will be increased to £350,000 and the age limit from 2 to 3 years. The annual investor limit will increase from £100,000 to £200,000.
- Company Share Option Plan (CSOP) – From April 2023, qualifying companies will be able to issue up to £60,000 of CSOP options to employees, which doubles the current £30,000 limit.
- The Annual Investment Allowance has been permanently set at the £1 million level instead of reverting back to £200,000 after 31 March 2023.
- The Energy Price Guarantee will cap the unit price that consumers pay for electricity and gas, limiting the average household bill to £2,500 per year for a period up to April 2023.
If you have any questions and/or would like advice regarding non-resident status and the obligations in relation to tax on UK property, please speak to Karen Dyerson at: email@example.com.