New Chancellor Kwasi Kwarteng set out a mini-budget on Friday with some headline grabbing tax cuts, which he says are the biggest in a generation.
What do they mean for you?
Income Tax.
Kwarteng has cut the basic rate of income tax from 20% to 19%, effective April 2023. The Government estimates 31 Million people will benefit from £170 more a year.
Basic rate applies to people who earn between £12,571 and £50,270 Per Annum.
He has also abolished the higher rate income tax of 45%, instead keeping one single rate of 40% for people who earn over £50,270.
Corporation Tax.
The Chancellor has decided to stop the planned rise in corporation tax to 25%, opting to keep it at the current 19%.
National Insurance.
The recent rise in NI contributions will be reversed from November 6th. Since April, both workers and employers have paid an extra 1.25% in the pound.
Stamp Duty.
There are changes to when and how much stamp duty you pay now when you buy a property in England and Northern Ireland.
The price in which you pay has now doubled from £125k to £250k. (First time buyers don’t pay until £425k)
From then the rates are:
5% £250k-925k
10% £925k-£1,500,000
12% £1,500,000 +
Energy.
The big talking point this summer. Kwasi Kwarteng has announced there will be a freeze on energy bills for both residential and businesses, costing the government an estimated £60 Billion for 6 months.
Working and Investments.
Companies can invest tax free annually at £1M indefinitely.
IR35 rules are going to be simplified.
Regulations are changing so pensions funds can increase UK investments.
Share options for employees have been doubled from £30k to £60k.
New and start up companies will be able to raise up to £250k under a scheme giving tax relief to investors.
Good news if you are a banker. The limitations on bankers’ bonuses have been scrapped.
For a more detailed overview of the plans, go to gov.uk .
If you’d like to discuss how the changes will affect you or your business, as always, give Soldi Partners a call.
Kindest,
Theresa.
