On 23 September 2022 the UK government announced a series of measures aiming to boost economic growth.
Corporation tax
The planned rise in corporation tax is cancelled, so the rate of corporation tax will remain at 19%.
The Annual Investment Allowance (AIA) is to remain at GBP 1 million permanently, instead of returning to GBP 200,000 in March 2023. The AIA gives 100% tax relief to businesses on their plant and machinery investments up to the higher GBP 1 million limit.
Income tax
From April 2023, the basic rate of income tax will be cut to 19%, one year earlier than previously planned.
Alongside cutting the basic rate of income tax, the Chancellor also abolished the 45% additional rate of tax, with effect from April 2023. In its place will be a single higher rate of income tax of 40%.
National Insurance Contributions
The 1.25 percentage point rise in National Insurance contributions will be reversed.
Off-payroll working
With effect from 6 April 2023 the reforms made to the reforms to the off-payroll working rules in 2017 (for people in the public sector) and 2021 (for the private sector) have been reversed. This means that individuals providing their services through an intermediary will have sole responsibility for establishing their employment status and paying the tax and national insurance contributions under the IR35 rules.
Stamp duty
The mini budget contained a package of major cuts to Stamp Duty Land Tax. The nil rate band will be raised from GBP 125,000 to GBP 250,000. The value of the property on which first time buyers can claim relief is increased from GBP 500,000 to GBP 625,000 with effect from midnight on 23 September 2022. The government will also increase the housing supply by increasing the disposal of surplus government land to build new homes.
Energy bills
To address the high cost of energy the government’s Energy Price Guarantee will save the typical household around GBP 1,000 a year on their energy bills, with the Energy Bill Relief Scheme halving the cost of business energy bills.
Investment Zones
The government is in discussion with 38 local and mayoral combined authority areas in England including Tees Valley, South Yorkshire and West of England to set up Investment Zones in specific sites within their area. Each Investment Zone will offer targeted and time limited tax cuts for businesses and liberalised planning rules to release more land for housing and commercial development. The Investment Zones are intended to become hubs for investment and growth.
Hospitality Industry
Sector specific support will be given to pubs and the hospitality industry.
Alcohol duty
Alcohol duty will be frozen for another year. Reforms to modernise alcohol duties will be taken forward and the government will publish a consultation on those plans.
Measures to unlock private investment
The Government will change regulations to increase investment by pension funds into UK assets.
Universal Credit
Universal Credit Claimants who earn less than the equivalent of 15 hours a week at National Living Wage will be required to meet regularly with their assigned work coach and take steps to increase their earnings or face having their benefits reduced. Jobseekers over the age of 50 will be given more time with jobcentre work coaches.
