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Updated Autumn Mini-Budget 2022

On 14th October, Kwasi Kwarteng was removed as Chancellor after a resounding negative response to his Autumn Mini-Budget. Following his dismissal, the government and new Chancellor, Jeremy Hunt, announced a reversal of various points from the budget.

 

Dividend Tax: The dividend income tax rates (currently 8.75%, 33.75% and 39.35%) will no longer be cut. They will remain the same from April 2023. The removal of the additional rate of dividend tax of 39.35% has also been reversed.

Income Tax: The basic rate of income tax will remain at 20%, after the current Chancellor reversed the decision to cut it to 19% from April 2023. The top income tax rate will also remain at 45%, reversing the proposed cut.

Corporation Tax: This will no longer remain at 19% and instead rise to 25% April 2023 as previously planned.

VAT/Duty: The proposals to freeze alcohol duty rates and introduce tax-free shopping for non-UK visitors have also been abolished.

 

Nevertheless, the government has maintained a few points.

National Insurance: The 1.25% National Insurance rise will still be reversed. This means the rates will fall to 12% and 2% as they were before the current tax year. This will be effective from November 2022.

Stamp Duty: The stamp duty cuts that benefit first-time buyers will be maintained. There will be no stamp duty for the first £250,000 of a home’s value (double the previous rate) and no stamp duty for the first £425,000 of a home’s value for first-time buyers.

Office of Tax Simplification:  The statutory body will close following the Royal Assent of the next Finance Bill.

 

The FSL Business Analysis team will continue to monitor and analyse any potential changes will have on our products.