In what was dubbed by many a ‘mini Budget’ Kwasi Kwarteng unveiled an unexpectedly wide range of measures with some surprises. Following on from the Prime Minister’s initial Energy Price Guarantee in early September and follow up announcement for business support measures this week, much of the media had already highlighted tax cuts to come on national insurance, corporation tax and stamp duty. These were all confirmed in the Chancellor’s early morning speech.
What was unexpected was a further range of measures amounting to the largest package of tax cuts seen for many years. These include:
- The abolition of the 45% additional tax rate in England, Wales and Northern Ireland from 2023/24.
- Bringing forward to 2023/24 the proposed cut to basic rate tax from 20% to 19%.
- Taking dividend tax rates back to their 2021/22 levels.
- Extending the £1 million annual investment allowance permanently.
- Cancelling the corporation tax increase from19% to 25%.
In what was only a relatively short speech, the Chancellor also announced that the controversial reforms to off-payroll working (IR35) will be rescinded and employers will no longer be responsible for categorising workers as employed or not. The pension cap charge will also be revised.
The ‘growth’ element in Mr Kwarteng’s ‘Growth Plan’ includes a round of infrastructure planning reforms and the development of new Investment Zones with a range of benefits to incentivise local business development.
As a final surprise, planned increases on duties for wine, beer, cider and spirits have also been cancelled.
We have summarised the full set of announcements and measures that may affect you. Please get in touch if you would like to discuss any aspect of these and their implications.
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