Chancellor Kwasi Kwarteng presented his 2022 growth plan on Friday 23rd September 2022. The Chancellor’s statement was not a Budget, but a ‘Growth Plan’.
The key announcements are summarised below;
Stamp Duty Land Tax
- No stamp duty to be paid on the first £250,000 – up from £125,000.
- First-time buyers pay no tax on the first £425,000 – up from £300,000.
- First-time buyers can claim relief for property values up to £625,000.
VAT
- No changes announced
Personal/Employee
- From 6 November 2022
- Reverse of the 1.25% increase in NICs rates and cancel the Health and Social Care Levy
- Employee rates will return to 12% and 2%, with an employer’s rate of 13.8%.
- The Self Employed rate will return to 9% and 2%.
- (REVERSED) Additional Rate Income Tax (45%) for those earning more than £150,000 will be abolished from 2023/24 tax year (not applicable in Scotland)- Since announcement has change been reversed and will no longer occur.
- Basic Rate Income Tax cut from 20% to 19% from 2023/24 tax year. This brings forward an already announced change (not applicable in Scotland).
- Gift aid and pensions tax relief (Relief at source schemes) will remain at 20% until 2024/25.
- From 6 April 2023 – Dividend Tax
- The 1.25% increase in the dividend rates is to be reversed.
- This change also affects the tax rate of tax paid by companies on outstanding loans to participators, which will reduce too.
Employer/Company
- Stop the proposed 2023 Corporation Tax Increase – leaving the tax at its current level – 19%
General
- The Annual Investment Allowance for businesses will be continued, and the cap restored to £1m.
Off-payroll working reforms will be repealed. The 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) will be repealed from 6 April 2023.
Seed Enterprise Investment Scheme (SEIS)
From April 2023:
- Companies will be able to raise up to £250,000 of SEIS investment. The current limit is £150,000.
- The gross asset limit will be increased from £200,000 to £350,000, and the trading time limit from two to three years.
- The individual annual investor limit of £100,000 will be doubled to £200,000.
Energy
The government will provide two support packages for domestic and business users of electricity and gas:
Domestic users
- Cost of living support package via an Energy Price Guarantee which supports households through a cap on the unit rate of electricity and gas.
- The newly announced support package will run alongside the existing measures already set out:
- £400 per household paid in six instalments from this October under the Energy Bills Support Scheme.
- £1,200 of extra support for the most vulnerable.
Non-domestic and business users
- The Energy Bills Support Scheme will provide support for business for a six month period.
- The scheme will be reviewed after three months
- There is the possibility of extension of the scheme for certain business after six months.
For a more in-depth summary on the statement, please click here
HMRCs Growth Plan: click here
For HMRCs Statement: click here
