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Mini-Budget at a Glance

On 23rd September 2022, the Chancellor of the Exchequer Kwasi Kwarteng delivered a set of economic policies, a mini-budget.

In the backdrop of a cost-of-living crisis, the mini-budget is designed to boost economic growth through tax cuts. The package, worth £161 billion, represents the biggest tax cuts in the UK since 1972. On 21st September ahead of the budget and having previously announced plans to cap the price of household energy bills for two years, the UK Government announced a scheme that would freeze wholesale gas and electricity prices for businesses for six months from 1st October 2022.

We have put together the key points for businesses at a glance below:

Energy

  • Freeze on energy bills, which the Government claims will reduce inflation by 5%
  • An energy package expected to cost around £60bn for six months from October 2022

Tax and duties

  • Cut in the basic rate of income tax to 19% from April 2023
  • 45% higher rate of income tax abolished for higher earners in England, Wales, and Northern Ireland from April 2023
  • From 6th November, reverse of the 1.25% rise in National Insurance introduced in April 2022
  • Plans to increase corporation tax from 19% to 25% in April 2023 have been scrapped
  • VAT-free shopping for overseas visitors
  • Planned increases in the duties on beer, cider, wine, and for spirits cancelled
  • Stamp duty threshold lifted to £250,000 with immediate effect (£425,000 for first-time buyers)

Work and investment

  • IR35 rules – which apply to contractors – will be simplified to remove “unnecessary complexity and cost” for businesses
  • Annual investment allowance, the amount companies can invest tax-free, will remain at £1m indefinitely
  • New and start-up companies are able to raise up to £250,000 under the scheme giving tax relief to investors
  • Share options for employees doubled from £30,000 to £60,000

Infrastructure and investment zones

  • The Government are discussing setting up investment zones with 38 local areas in England
  • Tax cuts and liberalised planning rules to be offered to release land for housing and commercial use
  • Investment zones offered measures such as no business rates and stamp duty waived
  • New legislation to cut planning rules, get rid of EU regulations and environmental assessments in an effort to speed up building