Mini Budget Statement September 2022 – headlines for your SME

The ethos behind the statement announced last week is to promote growth and simplify tax. Although labelled as a “mini” budget, it included the biggest changes to the tax system that have been announced for over 50 years. It wasn’t all about tax though. There are changes in National Insurance, Union workings, planning approaches, and of course the all-important energy crisis. Many of the changes announced are repealing reforms introduced in April 2022 or abolishing changes due to be implemented next year.

Individual Tax

Basic rate of income tax will be cut by 1p to 19p (April 2023)

Top rate of income tax has been abolished (April 2023). This impacts people earning over £150,000

Cap on bankers’ bonuses was abolished

Gift Aid relief will remain at 20% until April 2027

Relief at Source pension schemes will remain at 20% until April 2024

The planned increase in dividend tax will not happen, remaining at 7.5% and 32.5%

Corporation Tax

The planned rise in corporation tax will not happen, staying at 19%

Overseas Visitors

Tax-free shopping will be introduced for overseas visitors

Duty on beer, cider, wine and spirits

The planned increase in duty tax will not happen.

Stamp Duty

The threshold for stamp duty increased to £250,000 from £125,000. For first-time buyers, the threshold increased from £300,000 to £450,000. This was implemented immediately

National Insurance

The increase implemented in April 2022 will be reversed from 6 November 2022, taking it back to 12%

The Health and Social Care Levy due to be introduced in April 2023 has been abolished

Energy

For domestic energy, the energy price guarantee is now £2,500 for the average household: a saving of £1,000pa. This will be in place for two years. Plus, all energy account holders will receive £400 over the next four months, plus additional help for vulnerable households.

For business energy, a similar scheme is in place but with six months of protection initially, with the promise to review after winter. This is the Energy Bill Relief Scheme and will apply from 1 October 2022 to 31 March 2023.

Unions

Unions will be required to put offers to members during pay talks before taking strike action.

Off-payroll working (IR35)

From April 2023, workers providing their services via an agency will once again be responsible for their tax and national insurance payments.

Universal Credit

The rules around universal credit are to be tightened to encourage people back into work

Investment in Business

Investment Zones - to encourage growth in the economy and investment in housing and industry, as part of the “levelling up” approach. Specific investment zones will be identified around the UK. There will be time-limited enhanced tax reliefs will be offered for Stamp Duty Land Tax (SDLT), Enhanced Capital Allowances, Structures and Buildings Allowance and Employer National Insurance contributions#

Seed Enterprise Investment Scheme (SEIS) – has been expanded to make it easier for investors to invest more and claim tax relief. To be implemented in April 2023.

The Enterprise Investment Scheme and the Venture Capital Trusts will be extended beyond 2025 to help support new start-up companies.