New chancellor Kwasi Kwarteng made a number of announcements in the government’s investment planner mini budget on Friday last week (23/9/22).
Here’s a roundup of some of announcements:
- The basic rate of income tax will reduce from 20% down to 19% from April 2023. This should benefit over 30 million UK workers.
- The top rate of income tax will also reduce. Down from 45% to 40%, again from April next year.
- The 1.25% increase in National Insurance Contributions introduced in April will be scrapped from the 6th of
- The threshold for Stamp Duty has been increased to £250,000. A doubling of the previous threshold of £125,000. For first time buyers the limit has increased from £300,000 to £425,000.
- Increase in Corporation Tax which would have seen the tax rise to 25% have been scrapped and the rate will remain at 19%
- There are also a number of cuts to dividend tax rates.
These changes in the investment planner mini budget are said to be the most sweeping tax cuts for over a decade, according to commentators at the FT Adviser. It is estimated that the cuts will cost over £45 billion to implement.
This is part of the new prime minister’s strategy to boost growth in the economy, which was the mainstay of her election campaign platform. These new tax rates only apply in England and Wales. Changes n Scotland will be determined by the Scottish government later.
The investment planner mini budget review of changes will affect households in different ways. It may be that now might be a good time to take advantage of a free review meeting.
These announcements were made separately to the energy price cap announcement, which is estimated to cost the government a further£100 billion over the next two years. More than the cost of the Covid bailout and furlough only two years ago.