[UK] Breakdown of the chancellor’s mini-budget

[UK] Breakdown of the chancellor’s mini-budget
23 Sep 2022

The UK’s new chancellor Kwasi Kwarteng has announced what he described as the biggest tax cuts in a generation but what exactly was in his mini-budget today and how will it affect you? BBC News breaks down its contents.

Income tax

  • Cut in basic rate of income tax to 19 per cent from April 2023
  • The government estimates 31 million people will get £170 a year more
  • Currently, people in England, Wales and Northern Ireland pay 20 per cent on any annual earning between £12,571 to £50,270 (rates in Scotland are different)
  • 45 per cent higher rate of income tax abolished for England, Wales and Northern Ireland taxpayers
  • One single higher rate of income tax of 40 per cent from April next year

National Insurance

Corporation tax

Benefits

  • Rules around Universal Credit tightened by the reduction benefits if people don't fulfil job search commitments
  • Around 120,000 more people on Universal Credit to be asked to take steps to seek more work, or face having their benefits reduced
  • Jobseekers over 50 to be given extra time with work coaches to support their return to the job market

Work and investment

  • IR35 rules - the rules which govern off-payroll working - to be simplified
  • Annual investment allowance, the amount companies can invest tax-free, remains at £1m indefinitely
  • Regulations change so pensions funds can increase UK investments
  • New and start-up companies can raise up to £250,000 under scheme giving tax relief to investors
  • Share options for employees doubled from £30,000 to £60,000

Stamp duty

  • Cut to stamp duty which is paid when people buy a property in England and Northern Ireland
  • No stamp duty on the first £250,000 and for first-time buyers that rises to £425,000 - comes into operation today
  • 200,000 more people will be taken out of paying stamp duty altogether, the government claims

Energy

  • Freeze on energy bills, which the government claims will reduce inflation by 5 percentage points
  • Total cost for the energy package is expected to be around £60bn for the six months from October

Bankers' bonuses

  • Rules which limit bankers' bonuses scrapped
  • Package of regulatory reforms to be set out later in the autumn

Shopping

  • VAT-free shopping for overseas visitors
  • Planned increases in the duties on beer, cider, wine and spirits cancelled

Infrastructure and investment zones

  • Government discussing setting up investment zones with 38 local areas in England
  • Tax cuts and liberalised planning rules are to be offered to release land for housing and commercial use
  • Investment zones offered measures such as no business rates and stamp duty waived
  • New legislation to cut planning rules and get rid of EU regulations and environmental assessments in an effort to speed up building

Source: BBC News

(Links via original reporting)

The UK’s new chancellor Kwasi Kwarteng has announced what he described as the biggest tax cuts in a generation but what exactly was in his mini-budget today and how will it affect you? BBC News breaks down its contents.

Income tax

  • Cut in basic rate of income tax to 19 per cent from April 2023
  • The government estimates 31 million people will get £170 a year more
  • Currently, people in England, Wales and Northern Ireland pay 20 per cent on any annual earning between £12,571 to £50,270 (rates in Scotland are different)
  • 45 per cent higher rate of income tax abolished for England, Wales and Northern Ireland taxpayers
  • One single higher rate of income tax of 40 per cent from April next year

National Insurance

Corporation tax

Benefits

  • Rules around Universal Credit tightened by the reduction benefits if people don't fulfil job search commitments
  • Around 120,000 more people on Universal Credit to be asked to take steps to seek more work, or face having their benefits reduced
  • Jobseekers over 50 to be given extra time with work coaches to support their return to the job market

Work and investment

  • IR35 rules - the rules which govern off-payroll working - to be simplified
  • Annual investment allowance, the amount companies can invest tax-free, remains at £1m indefinitely
  • Regulations change so pensions funds can increase UK investments
  • New and start-up companies can raise up to £250,000 under scheme giving tax relief to investors
  • Share options for employees doubled from £30,000 to £60,000

Stamp duty

  • Cut to stamp duty which is paid when people buy a property in England and Northern Ireland
  • No stamp duty on the first £250,000 and for first-time buyers that rises to £425,000 - comes into operation today
  • 200,000 more people will be taken out of paying stamp duty altogether, the government claims

Energy

  • Freeze on energy bills, which the government claims will reduce inflation by 5 percentage points
  • Total cost for the energy package is expected to be around £60bn for the six months from October

Bankers' bonuses

  • Rules which limit bankers' bonuses scrapped
  • Package of regulatory reforms to be set out later in the autumn

Shopping

  • VAT-free shopping for overseas visitors
  • Planned increases in the duties on beer, cider, wine and spirits cancelled

Infrastructure and investment zones

  • Government discussing setting up investment zones with 38 local areas in England
  • Tax cuts and liberalised planning rules are to be offered to release land for housing and commercial use
  • Investment zones offered measures such as no business rates and stamp duty waived
  • New legislation to cut planning rules and get rid of EU regulations and environmental assessments in an effort to speed up building

Source: BBC News

(Links via original reporting)

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