News
Chancellor's Emergency Statement
On 17 October 2022, having already shelved the plan to scrap the abolition of the additional rate of income tax and of an increase in Corporation Tax, the new chancellor Jeremy Hunt has reversed almost every tax-cutting measure announced within the mini-Budget by his predecessor.
We set out below a summary of the main announcements but in the meantime please speak to your usual Statura contact should you wish to discuss the content of this document in more detail or indeed the way in which the more recent announcement might affect your personal circumstances.
PERSONAL AND EMPLOYMENT TAXES
Rates and allowances
The basic rate of income tax will remain at 20% “indefinitely”.
The plan to abolish the Additional Rate of Income Tax of 45% (which currently applies to annual income above £150,000) has been axed.
Similarly, the 1.25% increase in dividend tax rates will remain. Dividend tax rates will therefore no longer be cut from April 2023.
National Insurance Contributions rates and the Health and Social Care Levy
The reversal of the 1.25% national insurance contribution rate increase from 6 November 2022 and the abolition of the Health and Social Care Levy will go ahead as planned.
Off-payroll working
The existing off-payroll working rules (IR35) will remain in place and will not be repealed from April 2023 as announced in the Mini-Budget.
BUSINESS TAXES
Corporation Tax rates
The corporation tax rate will indeed increase to 25% from 1 April 2023 as originally planned and legislated, affecting companies with profits of £250,000 and over. The legislation that provided for this increase also sets out that small companies with profits up to £50,000 will continue to pay corporation tax at 19%, with profits between these two figures being subject to a tapered rate.
Capital allowances
The Annual Investment Allowance (AIA) £1m permanent threshold will remain.
VAT AND INDIRECT TAXES
The digital VAT-free shopping scheme will not be introduced.
The government will go ahead with the planned alcohol duty increase for wine, beer and spirits, axing the freezing of duty rates announced in the Mini-Budget.
STAMP DUTY AND STAMP DUTY LAND TAX
The reduction in Stamp Duty Land Tax on residential properties, effected by the abolition of the 2% band and the increased thresholds for first-time buyer relief, has been confirmed.