Mini Budget – Special Report
Following our first reactions and summary of the Chancellor’s Budget speech on Friday 22nd September from Naylor Wintersgill tax director Simon Roberts, download our special report to stay informed and fully up to date with the tax and legislation changes announced.
In his first Budget speech as Chancellor, Kwasi Kwarteng said that ‘we need a new approach for a new era, focused on growth’. He would build this around three priorities: reforming the supply side of the economy, maintaining a responsible approach to public finances, and cutting taxes to boost growth. What followed certainly delivered on the third of these things: this package has been described as the biggest tax cutting budget for half a century, following on from the earlier announcement of very substantial support for individuals and businesses coping with rising energy prices.
The Chancellor also put forward a number of proposals to reduce costs and regulation for businesses, moving the levers of tax and legislation to encourage investment, employment and economic growth. It remains to be seen whether the UK’s productivity and national income will respond in line with his aspirational target of 2.5% a year.
The other priority, fiscal responsibility, was covered in less depth. The response of the financial markets to the announcement of such substantial tax cuts was immediate: the value of the pound and the main stock market index both fell. The Chancellor put off the publication of the plans to reduce government debt over the medium term, and full economic and fiscal forecasts, until later in the year.
- Reversal of the April 2022 increase in National Insurance rates with effect from 6 November 2022.
- Cancellation of the Health and Social Care Levy that was to be introduced in April 2023
- Cancellation of the 1.25% addition to dividend tax rates that was introduced in April 2022, with effect from April 2023
- Basic income tax rate cut to 19% a year early, from April 2023
- Cancellation of planned corporate tax increase to 25% in April 2023: the rate will remain 19%
- Increases in thresholds for Stamp Duty Land Tax with immediate effect
- From April 2023, repeal of the ‘off-payroll working’ measures introduced in 2017 and 2021
- Confirmation of energy cost support packages
The government is taking big but potentially risky steps to promote growth. Our detailed report describes the main measures that were announced, as well as some things that might have been announced but were left unsaid, and explains the context.
Download our Mini Budget Report here. (Following the government’s change of mind on the abolition of 45% additional rate for taxpayers earning over £150,000 our Mini Budget report has been updated accordingly).
Our team of tax experts will continue to provide further detailed analysis of the new measures in the coming days and of course, if you want to talk about the announcement, what it means for you and your finances or how we can work together more generally, please do get in touch.
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