I’m no economist and whilst none of us can forecast if Kwasi’s gamble on growth will pay off, I’m biased as a business owner that for the short-term this may well be a relief for many business owners. But I appreciate there are many concerns regarding paying this back, whether it pays off, and the impact on markets.
So what has happened, whilst there was nothing too radical there are some great changes for business owners and that’s how I’ve summarised this:
- So instead of an increase to 25% for corporation tax from April 2023 (for profits over £50,000) profits will continue to be taxed at 19%.
- The annual investment allowance will now be permanently at £1m meaning businesses will continue to be able to invest in plant, machinery, and assets in their business (depending on what they are, it’s never 100% simple) and get full relief in the year of purchase up to that level (I mean I’m not intending on spending £250k anytime soon on desks and other assets, but if that’s in your budget hooray!)
- IR35 rules are going to be simplified – this puts the onus back on the company who provides the service to determine their employment status and pay the appropriate rate of tax and NIC
- NIC rate reduced by 1.25% this will come into effect from the 6 November and will save employees and employers National insurance and will remain at this rate for next year
- The NIC rate reduction has been confirmed. This means that from 6 November, employees and employers will not pay the additional 1.25% they have been paying since April 2022.
- The NIC cut will apply to dividends too but from April 2023. This means on your earnings over your personal allowance up to £50,270 instead of 8.25% to 7.5%, and for earnings over £50,270 the rate above will be 32.5% instead of 33.75%.
- The upper bracket for income tax has been removed completely so if you earn over £150,000, for salaries you will be taxed at a highest of 40% and for dividends 32.5%.
- And from next year the income tax band for income over £12,570 will be charged at 19% rather than 20%
- If you’re looking at buying a new home, then the first £250k will no longer attract stamp duty (If you’re a first time buyer, this relief has been extended to £425k with the ability to buy a house worth £625k)
- Finally we’re pleased to hear about the Government supporting with his Energy Bill relief scheme.
- Want to read the detail click here