How Does It Impact on You and Your Business?
The mini-budget 2022 by Kwasi Kwarteng has enormous changes for individuals and businesses here in the UK. However, the budget becomes questionable, though the Prime Minster and Chancellor are confidence for the economic growth. In this article, we will note the key aspects of the budget.
Key Aspects of The Mini-Budget 2022: –
- The corporation tax will remain at 19% and the planned increase to 25% from April 2023 bas been withdrawn. This is good news for small businesses as they are struggling since the COVID-19 pandemic.
- The 1.25% increase in dividend tax will be abolished from April 2023 which came into effect from this year (April 2022).
- From April 2023, the income tax will be cut from 20% to 19% for basic rate taxpayers. In addition, the additional rate (45%) of income tax will also be abolished and only the higher rate of income tax at 40%. It looks like huge incentive for enterprise and hard-working people.
- The rise of 1.25% in National Insurance (NI contributions) from 06 July 2022 will be reversed from 6 November 2022. As a result, you have “better take home” from your employment income.
- In the past few years, the off-payroll working has been incredibly debatable. Good news! the controversial IR35 has been eliminated and this is a great move for the entire contracting industry.
- With the aim of high growth and low tax, the government cuts Stamp Duty Land Tax by doubling the level (from £125,000 to £250,000) for purchasing a residential property. Moreover, the SDLT is nil (level increase from £300,000 to £425,000) for the first-time buyers when the property price is less than £625,000 (rather than the current £500,000). This is really a great news for the property industry when the interest rate is rising sharply.
- The Annual Investment Allowance (AIA) will remain at £1m and the planned fall to £200,000 from April 2023 has been removed.
- To encourage investment in the small businesses, the investors can invest annually up to £200,000, which is double of the current limit. In addition, the company can raise up to £250,000 rather than the current limit of £150,000.
- No major changes announced in the mini-budget regarding VAT, only VAT free shopping for overseas visitors. This will be replaced the old paper-based system with the digital one. It could encourage more visitors here in the UK that leads to the economic growth.
The mini-budget has huge tax cuts with the aim of economic growth and the question is whether this is sustainable as the government has huge debt because of the COVID-19 support made and the current war in Ukraine.
Disclaimer: The above information is just as a general information that might help you. However, we highly recommend having expert advice suited for your circumstances. The Stan Lee and its author are not liable if you rely on this and have any consequences.