Income Tax – England and Wales
- The previously announced measure of a 1% reduction to the Basic Rate of Income Tax (currently set at 20%) is being brought forward from April 2024 to April 2023. From April 2023 the rate will be set at 19%
- The Additional Rate of Income Tax of 45% on taxable income over £150,000 is to be abolished from April 2023. The Higher Income Tax rate of 40% will now apply to income over £150,000
- The Dividend Additional Rate of tax which is currently set at 38.1% will also be abolished and the higher rate of 32.5% will apply to dividend income over £150,000
- Additional Rate taxpayers will now benefit from the Personal Saving Allowance of £500
Budget document The Growth Plan 2022 Factsheet on Income Tax
Social Care Levy
- Social Care Levy of 1.25% will be abolished from 6 November 2022 in so far as the National Insurance rates will revert to 2021/22 levels on this date
- The change is not retrospective so earnings that arose before 6 November 2022 will have been subject to the levy and earnings after will not
- Employers and directors should consider deferring discretionary payments such as bonuses until November if reasonable to do so in order to reduce the National Insurance charge on such payments
- For the self-employed, who calculate their National Insurance on profits at the end of the year, the rate of Class 4 National Insurance will be a ‘blended’ rate, to account for the change part way through the tax year
- The levy had also been attached to the income tax rate for dividends from 6 April 2022. The announcement confirms that this will remain for the rest of the current tax year, with the rate reduction applying from April 2023 rather than in November 2022. It should therefore be considered whether any dividends might be deferred until after 5 April 2023 in order to pay a reduced rate of tax
Budget document The Growth Plan Factsheet on Cancellation of National Insurance Rise and Health and Social Care Levy
Corporation Tax
- The planned increase due from April 2023 has been cancelled and the rate will remain at 19%
Budget document The Growth Plan 2022 Factsheet on Corporation Tax
Stamp Duty Land Tax
- Nil rate band has doubled from £125,000 to £250,000
- The level first-time buyers start paying Stamp Duty Land Tax will increase from £300,000 to £425,000
- An increase in the property value first-time buyers will be able to access the relief will increase to £625,000 from £500,000
Budget document The growth Plan 2022 Factsheet on Stamp Duty Land Tax
Other measures announced:
- Annual Investment Allowance annual limit will remain at £1,000,000 permanently
- Off-payroll working rules (also known as IR35) will be repealed from 6 April 2023
- Widening the availability of Seed Enterprise Investment Scheme (SEIS)
- Increased limit on employees share options under the Company Share Option Plan (CSOP)
- Alcohol Duty will be frozen from February 2023
- Announcement of new Investment Zones
Budget document The Growth Plan 2022
Welcome news for businesses as the Government outlines plans to help cut energy bills
Through the new Energy Bill Relief Scheme, the Government will provide a discount on wholesale gas and electricity prices for all non-domestic customers.
It will apply to:
- existing fixed price contracts that were agreed on or after 1 April 2022
- signing new fixed price contracts
- on deemed / out of contract or variable tariffs
- on flexible purchase or similar contracts
It will be based on energy usage from 1 October 2022 to 31 March 2023, running for an initial 6-month period for all non-domestic energy users.
For all non-domestic energy users in Great Britain this government supported price has been set at:
- £211 per megawatt hour (MWh) for electricity
- £75 per MWh for gas
Those on default, deemed or variable tariffs will receive a per-unit discount on energy costs, up to a maximum of the difference between the supported price and the average expected wholesale price over the period of the scheme.
The support will be automatically applied to all eligible bills. You do not need to take action or apply to the scheme. The savings for energy used in October will be seen in your October bills, which would usually be received in November.
This Scheme is expected to see energy bills cut by around half their expected levels this winter. This offers some respite for businesses who have seen their costs spiral to unprecedented levels.
Government document Energy Bill Relief Scheme Help for Businesses and Other Non Domestic Customers
