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
- Reversal of recent rise in National Insurance (NI) from 6 November
- Workers and employers have paid an extra 1.25p in the pound since April
- New Health and Social Care Levy to pay for the NHS will not be introduced
Corporation tax
- Cancellation of UK-wide rise in corporation tax which was due to increase from 19 per cent to 25 per cent in April 2023
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
- Reversal of recent rise in National Insurance (NI) from 6 November
- Workers and employers have paid an extra 1.25p in the pound since April
- New Health and Social Care Levy to pay for the NHS will not be introduced
Corporation tax
- Cancellation of UK-wide rise in corporation tax which was due to increase from 19 per cent to 25 per cent in April 2023
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)