UK – MINI BUDGET SUMMARY
Chancellor Kwasi Kwargeng unveiled mini budget tax cuts for individual and business including major shake up to income tax and stamp duty to send a clear signal that economic growth is the government priority.
Income tax cuts
- 45% additional rate income tax band for those earning more than £150,000 will be scrapped entirely.
- The 40% higher rate, charged on incomes above £50,271, will remain.
- the basic rate of income tax reduces from 20% to 19% from April 2023.
- 1.25 percentage point national insurance rise introduced earlier this year will be cancelled from 6 November.
The bankers’ bonus cap will be scrapped, to “reaffirm” the UK’s status as a leading financial centre.
Business tax cuts
The next year’s increase in corporation tax from 19% to 25% will be cancelled. It will remain at 19% – the lowest rate of corporation tax in the G20.
Stamp duty are to be cut for property buyers in England and Northern Ireland with immediate effect.
- In the current system, there is no stamp duty to pay on the first £125,000 of a property’s value. It will be doubled to £250,000.
- The threshold for first-time buyers will rise from £300,000 to £425,000.
- The maximum property value for first-time buyers’ relief will rise from £500,000 to £625,000.
Other tax changes
The chancellor said he will scrap the Office of Tax Simplification (OTS) introduces measures to cut or reform tax rules which include:
- IR35 rules – which apply to contractors – will be simplified to remove “unnecessary complexity and cost” for businesses.
- Planned increases in duty rates for beer, wine and cider will be cancelled.
The chancellor confirms almost 40 investment zones will be created with tax breaks for businesses.
Areas will include the Tees Valley, West Midlands, Norfolk and the west of England.
Growth and public finances
The chancellor said that the government will expand the supply side of the economy through tax cuts to target economic growth of 2.5% a year.
There are plans to freeze household energy bills at £2,500 for a typical household. The government’s energy support scheme is expected to cost £60bn for the six months from October.
The government will bring forward measures to streamline regulations and remove EU-derived laws.
Legislation preventing strikes
The government will legislate to tackle “militant trade unions” from closing down key infrastructure through strikes.
The laws will require unions to put pay offers to a member vote, to ensure strikes can only be called once pay talks have genuinely broken down, he says.