Further updates on the changes to last month’s Fiscal Event
On Monday 17 October The new Chancellor of The Exchequer, Jeremy Hunt, brought forward a number of measures from 31 October’s Medium-Term Fiscal Plan. The decisions taken are to ensure the UK’s economic stability and to provide confidence in the government’s commitment to fiscal discipline.
Included in the announcement were details of the Energy Price Guarantee and the Energy Bill Relief Scheme. The Chancellor made clear they will continue with this scheme until April next year, with a Treasury-led review being launched to consider how to support households and businesses with energy bills after April 2023. The objective of the review will be to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.
In his statement the Chancellor announced a reversal of almost all of the tax measures set out in the Growth Plan that have not been legislated for in parliament. The Chancellor will publish the Government’s fiscal rules alongside an OBR forecast, and further measures, on 31 October, however in the meantime and for ease we have summarised the changes below:
Personal taxes
September 2022 Proposals |
Retained |
Scrapped |
The basic rate of income tax will be reduced from 20% to 19% from April 2023. |
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The 20% basic rate of income tax will remain indefinitely. |
The 45% additional rate of income tax, is to be abolished altogether. |
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The 45% additional tax rate of tax will remain. |
The Dividend rate increase which was due to take effect has been reversed. |
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The dividend rate increase of 1.25% will go ahead as announced by the previous Chancellor, Rishi Sunak. |
The tax free dividend allowance will remain at £2,000 per annum. |
The dividend allowance will remain unchanged. |
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The increase in National Insurance rates for employees, employers and self-employed individuals of 1.25% will be reversed from 6 November 2022. |
The reversal of National Insurance rates increasing will remain in place. |
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The Health and Social Care Levy that was to be introduced from April 2023 is to be reversed. |
The reversal of the Health and Social Care Levy will remain in place. |
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The Capital Gains Tax (CGT) Annual Exempt amount will remain at £12,300 for individuals, personal representatives and some trusts and £6,150 for most trusts. |
No changes will be made to the CGT annual exemption. |
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The new basis period reform to simplify the basis period rules for the self-employed and partners will still go ahead as planned. |
The new basis period reform will remain and be implemented from 6 April 2024. |
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The 0% tax rate for savings income will remain unchanged up to a value of £5,000 for the 2022/23 tax year. |
No changes will be made to the savings rate. |
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The annual subscription limit for adult ISAs will remain unchanged at £20,000 until April 2026. |
No changes will take place. |
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The annual subscription limit for junior ISAs also remains unchanged at £9,000 until April 2026. |
No changes will take place. |
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With effect from 6 April 2028 the normal minimum pension age in which you can access your pension without incurring a tax charge will increase from 55 to 57 years of age. |
The Minimum pension age increase will remain unchanged. |
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Making Tax Digital will be introduced from 6 April 2024 for Sole Traders. General partnerships will be required to join MTD for ITSA from 6 April 2025. |
The MTD measures will remain unchanged. |
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From April 2023 the SEIS investment annual amount be doubled from £100,000 to £200,000. |
The increase in the amounts individuals can invest into SEIS will remain unchanged |
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Corporate Taxes
| September 2022 Proposals |
Retained |
Scrapped |
|
The corporation tax rate planned increase from 19% to 25% due to take effect as from April 2023 was to be abolished |
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The planned increase in the corporation tax rate will now take effect as from April 2023 |
| The capital allowances Annual Investment Allowance (“AIA”) would be permanently set at £1m | The AIA proposal set at £1m would be retained |
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The stamp duty land tax nil-rate band which applies to residential property purchases in England and Northern Ireland was doubled to £250,000 |
This measure has been enacted and therefore retained |
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First-time residential property purchasers currently pay no stamp duty on the first £300,000 - this will be increased to £425,000. The value of the property on which first-time buyers can claim stamp duty relief will also rise from £500,000 to £625,000. |
This measure has been enacted and therefore retained |
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VAT-free shopping scheme for non-UK visitors to Great Britain |
This measure will no longer be enacted |
Should you have any queries or questions in respect of the above, please do not hesitate to contact your main contact at Arnold Hill & Co LLP or Reuben Fevrier or Lucy Duncan.
Email - Reuben.Fevrier@Arnoldhill.co.uk
Contact Number - +44 (0) 207 306 9105
Email - Lucy.Duncan@Arnoldhill.co.uk
Contact Number - +44 (0) 207 306 9102
Disclaimer
The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice. No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.