Your Mini Budget Snapshot

Following a surprising set of economic policies put out by the Chancellor of the Exchequer Kwasi Kwarteng last week, we put together a snapshot of the headline Mini Budget announcements:

Income tax

From April 2023, the government will decrease the basic rate of income tax on non-savings and non-dividend income from 20% to 19%.

The additional rate of income tax (currently 45% on all earnings above the £150,000 threshold) will also be removed from April 2023, meaning this portion income will instead be taxed at 40%.

Dividend tax

The government is reducing the tax rates on dividends by 1.25% from 6 April 2023. This means that the ordinary and upper rates of dividend tax will be reduced back to their 2021-22 levels of 7.5% and 32.5% respectively.

The additional rate for dividends (currently 39.35% on dividends above £150,000 threshold) will also be removed from April 2023, meaning this portion of dividends will instead be taxed at 32.5%.

National Insurance

The government is reducing the rates of Class 1 and Class 4 National Insurance contributions (NICs) by 1.25% in November 2022 and cancelling the introduction of the Health and Social Care Levy as a separate tax from April 2023.

Stamp Duty Land Tax

From 23 September 2022, the threshold above which Stamp Duty Land Tax (SDLT) must be paid on the purchase of residential properties in England and Northern Ireland has increased from £125,000 to £250,000.

The government have also increased the relief that first-time buyers can receive. From 23 September 2022, the threshold at which first time buyers begin to pay residential SDLT has increased from £300,000 to £425,000, and the maximum value of a property on which first-time buyers relief can be claimed has also increased, from £500,000 to £625,000.

Corporation Tax

The government will keep the corporation tax rate at 19% from April 2023. There had been plans to increase this rate to 25%. These plans have now been scrapped.

Off working payroll (IR35)

From 6 April 2023, workers across the UK who provide services via an intermediary (such as a limited company), will once again be responsible for determining their employment status and paying the appropriate amount of tax and NICs. Reforms had previously taken place to place to put this responsibility on the contracting business