September 2022 Mini-Budget

Today’s mini-budget contained a few surprises. We will be reviewing the changes in more detail in the coming weeks but for now here are the headline changes.

Income Tax – from April 2023 the basic rate of tax will be cut to 19%, the additional rate of 45% is abolished as is the additional rate for dividends.

Stamp Duty Land Tax – the threshold for residential property is doubled from £125,000 to £250,000, rates of SDLT above this level remain at their existing levels, first time buyers relief is increased to £425,000 and can be accessed on purchases up to £625,000.

Corporation Tax – The planned increase to 25% from April 2023 will no longer go ahead, the rate will remain at 19% for all firms regardless of size.

Business Tax – The Annual Investment Allowance is being permanently set at £1Mil rather than reverting to £200,000, The Seed Enterprise Investment Scheme is to be expanded, The Company Share Option Plan scheme will also be expanded, and the government is in discussion with 38 local authorities with a view to setting up local Investment Zones benefiting from lower taxes and accelerated development.

Off-Payroll Working Regulations – The off payroll working rules will be repealed returning us to the previous IR35 rules removing the onerous obligations placed upon contractors.

National Insurance – The recent 1.25% rise for employees and employers will be reversed from November, the 1.25% increase in dividend tax is also to be reversed. The self employed and company directors will pay a blended rate of national insurance when they submit their annual self-assessment forms.

Seed Enterprise Investment Scheme (SEIS) – From April 2023, companies will be able to raise up to £250,000 of SEIS investment, a two-thirds increase. To enable more companies to use SEIS, the gross asset limit will be increased to £350,000 and the age limit from 2 to 3 years. To support these increases, the annual investor limit will be doubled to £200,000.

Company Share Option Plan (CSOP) – From April 2023, qualifying companies will be able to issue up to £60,000 of CSOP options to employees, double the current £30,000 limit. The ‘worth having’ restriction on share classes within CSOP will be eased, better aligning the scheme rules with the rules in the Enterprise Management Incentive scheme and widening access to CSOP for growth companies.

We will update you with more information as more details, guidance, and legislation is introduced.