The Chancellor’s Mini Autumn Budget
Measures in summary
The new Chancellor Kwasi Kwarteng has delivered an Autumn mini budget and growth plan. His growth plan is based on ‘reforming the supply side of the economy, maintaining a responsible approach to public finance and cutting taxes to boost growth.’ He has addressed the cost of energy, reversed planned tax rises and National Insurance increases, cut stamp duty from today and more.
This article outlines a summary of the measures announced.
Three steps to combat energy costs
- Energy price guarantee that will limit bills for the average household to £2,500;
- For businesses, the government has introduced the energy bills relief scheme. This will provide a price guarantee equivalent to the one for households; and
- The government is announcing an energy markets financing scheme. This will offer emergency liquidity to traders.
Planned increase in corporation tax cancelled
Confirmation that the government will review the tax system and that next year’s planned increase in corporation tax will be abandoned.
Beer, cider and wine duty rate increases cancelled
Planned increases in duty rates for beer, cider, wine and spirits will be cancelled.
- The top rate of income tax – the 45% rate for earnings over £150,000 – is being abolished altogether.
- The government will cut income tax by 1p in the pound from April next year. That is one year earlier than planned and it will take the rate down to 19%.
The Chancellor has confirmed that the National Insurance increase is being reversed from November.
Stamp duty cut from today
No stamp duty will be paid on the first £250,000 of the price of a property and for first time buyers, the threshold will be £425,000.
Annual investment allowance will not be cut
The annual investment allowance will not be cut as planned.
The chancellor announced that he will abolish the Office of Tax Simplification, because all of his officials will have to focus on tax simplification.
Retained EU regulations will be subject to a sunset (i.e. repealed, if the government does not decide to renew them) from December 2023.
Removing planning restrictions
There will be announcements in the coming weeks covering the planning system, business regulations, childcare, immigration, agricultural productivity and digital infrastructure.
Kwarteng said that the planning system is too slow and that the government will bring forward a bill “to unpick the complex patchwork of planning restrictions and EU derived laws that constrain our growth”.
Union strike legislation
The Chancellor stated that other countries have legislation to ensure minimum services continue during strikes. This government will do the same and it will legislate so that unions must put pay offers to a vote.
Bankers bonus caps to be lifted
The pension charge cap will be reviewed so that pension funds can invest more easily in UK assets. He also confirmed he will lift the cap on bankers’ bonuses.
Low investment zones
Confirmation that the government will be setting up “new investment centres”. “We will cut taxes for businesses in designated tax sites for 10 years. There will be accelerated tax reliefs for structures and buildings and 100% tax relief on qualifying investments in plants and machinery, on purchases of land and buildings for commercial or new residential developments.
There will be no stamp duty to pay whatsoever on newly occupied business premises. There’ll be no business rates to pay whatsoever and if a business hires a new employee in the tax site, then on the first £50,000 pounds they earn, the employer will pay no National Insurance whatsoever.”
The chancellor announced that the government is discussing creating these zones in nearly 40 places.
If you have any questions about what these announcements may mean for you or your business, please get in touch with your Swindells partner who will be able to advise you further.
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