The exemption for paying Capital Gains Tax (CGT) is changing. The CGT annual exemption will…
The markets have experienced considerable volatility as a result of the ‘Growth Plan’ delivered by the former Chancellor, Kwasi Kwarteng on 23 September.
That made regaining economic confidence an urgent task for the newly appointed Chancellor, Jeremy Hunt, who has delivered a reversal of many of the key tax measures announced in the mini-Budget in a new fiscal statement.
The only big measures to survive were changes to Stamp Duty Land Tax (SDLT) thresholds and the cut to National Insurance due on 6 November.
The new announcements at a glance:
As previously announced, the Additional rate of Income Tax will remain in effect.
The Chancellor has now also cancelled the one penny-in-a-pound cut to the Basic rate, which was brought forward by Kwasi Kwarteng from April 2024 to April 2023. It will now remain at 20 per cent indefinitely.
The 1.25 percentage point increase that took effect from April 2022 will no longer be reversed from April 2023. This means the current rates of dividend tax will instead remain in effect.
As announced by the Prime Minister on Friday, Corporation Tax will not remain at 19 per cent for all companies and instead will be levied at 25 per cent for those with profits of more than £250,000 from April 2023.
Those with profits below £50,000 will continue to pay at 19 per cent, while marginal relief will be available to those with profits between £50,000 and £250,000.
Energy Price Guarantee
The Energy Price Guarantee for households will remain in effect until April 2023, rather than for two years as originally announced. The Energy Bill Relief Scheme for businesses will also be reviewed before April 2023.
HM Treasury will review these policies with a view to reducing the cost of the measure and making business support more targeted.
IR35/Off-payroll Working Rules
The planned reversal of the 2017 and 2021 reforms to the IR35/Off-payroll Working Rules in the public and private sectors from April 2023 will now not take place.
It will remain for employers to determine whether a contractor falls within the scope of the rules and should be taxed similarly to an employee.
The planned freeze in Alcohol Duty rates from 1 February 2023 has been cancelled.
National Insurance/ Social Care Levy
The cancellation of the increase in National Insurance from 6 November and the Social Care Levy that was to have been introduced from April 2023 remains in effect.
Stamp Duty Land Tax (SDLT)
The changes to the Stamp Duty Land Tax (SDLT) thresholds that took effect immediately after the mini-Budget remain in place and will not be cancelled.
Annual Investment Allowance
This tax relief on plant and machinery will be permanently retained at £1 million, as outlined in the mini-Budget.
Tax-advantageous investment schemes
The Seed Enterprise Investment Scheme and the Company Share Options Plan will also continue to further support business investment having been expanded upon in the mini-Budget.
The Chancellor’s announcements may have significant tax planning implications. Please contact us for advice.