Mini Budget Highlights - 23 September 2022

The government’s response to rising energy prices and the predicted cost of living crisis presents us with an unprecedented change in tax policy. Here are some of the highlights:

• The 45% additional rate of income tax that relates to earnings over £150,000 was planned to be scrapped but has been reinstated as of today.

• The 1.25% health and social care levy will be reversed effective from 6 November 2022.

• The 1.25% increased tax rate for dividends will also be abolished from April 2023.

• The basic rate of income tax will be reduced from 20% to 19% from April 2023.

• The cost of gas and electricity has been capped and should be £2,500 per year if you are an “average household”. This does not mean that it will be capped at £2,500, if you use more, you will pay more.

• Those using alternative heating fuels will receive £100 in financial support.

• The stamp duty threshold has risen from £125,000 to £250,000.

• For first time buyers, the threshold for stamp duty will increase from £300,000 to £425,000 and the maximum value of the property which this relief can be applied to also increases from £500,000 to £625,000.

• Alcohol duty has been frozen.

• Previous IR35 reforms have been revoked meaning that from 6 April 2023 the determination of employment status for contractors lies with the individual again.

• Corporation tax for limited companies planned increase has been scrapped and so will remain at 19%.

• The Annual Investment Allowance for plant and machinery will remain at £1 million.

• The Energy Bill Relief Scheme (EBRS) will temporarily protect businesses and other non-domestic energy users for up to 6 months with a review after 3 months.