As you may be aware of, on the 3rd of October 2022 Kwasi Kwarteng (Chancellor of the Exchequer) retracted the planned abolition of the 45p tax rate.
In the update announcement it states;
“It is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.”
The full announcement can be found here
Some news you may well have been aware of is the announcement by new chancellor Kwasi Kwarteng of the Mini budget.
Despite its ‘Mini’ status, the announcements have made a huge impact on the world of tax and for you and your business.
A big announcement is that the upcoming Corporation tax rise that was due to be implemented in April 2023 was to be scrapped, with it staying at the current 19%. Prior to this, it was expected that the percentage would rise from 19% to 25%.
However, this is not the only tax that is being cut…
Cut to income tax
The income tax cut, which was intended to be implemented in 2024, has now been brought forward to 2023.
But what exactly is the cut?
It was announced that the basic rate will be reduced to 19% compared to the current 20%. This news is for those who earn over the threshold (that is £12,570).
This news will be important for homebuyers in England and Northern Ireland.
Stamp duty will not be tax on the properties first £250,000, an increase from the previous threshold which was £125,000.
The initial raise of National Insurance Contributions (NIC) has been reversed, the chancellor has stated.
“The initial rise of 1.25% will be reversed on the 6th of November.”
Those with a yearly salary of:
- £15,000 will save £30.38
- £20,000 will save £92.88
- £30,000 will save £217.88
For those in the high bands:
- £50,000 will save £467.88
- £75,000 will save £780.38
- £100,000 will save £1,092.88
All caught up
We hope this breakdown of the new mini budget has helped.
For more information on the recent mini-budget announcement, get in touch with us.
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This guide is an informative piece and does not constitute tax advice for individual matters.