The newly formed UK Government led by our new Prime Minister, Liz Truss have wasted no time in setting our their plans to support the UK Economy, and this morning the Chancellor, Kwasi Kwarteng updated the House of Commons on their plans to boost growth.

Here is a summary of the key changes following the recent announcement and how they impact you:

We will continue to keep this page updated as the plans are released in more detail

Income Tax

• The basic rate of income tax will be reduced from 20p in the pound to 19p in the pound for basic-rate taxpayers. This will come into effect in the new tax-year (i.e. From 6th April 2023)
• The additional rate of income tax is currently 45%, this will be removed as part of the UK Governments plans to simplify the UK tax system. Additional rate taxpayers will no longer pay the additional rate of income tax and will remain in the higher tax bracket of 40%

National Insurance Contributions

• Reversal of the recent rises in National Insurance which will be reversed on the 6th November 2022. The National insurance threshold was previously raised to £12,570.00 in line with the personal allowance for income tax
• This does not have any benefit to pensioners as they do not pay National Insurance Contributions

Energy Costs

• Previous support was outlined by the UK Government to cap household energy costs over the Winter through the Energy Bill Relief Scheme
• This has recently been extended to UK businesses with targeted support for energy intensive companies

Stamp Duty Land Tax (SDLT)

• Effective from today, the threshold for previous homeowners or home-movers where Stamp-Duty becomes payable has increased from £125,000.00 to £250,000.00
• The rate in which first-time buyers currently pay no Stamp Duty Land Tax is being increased from £300,000.00 to £425,000.00
• There are still no announcements on further support for first-time buyers with the Help to Buy Equity Loan scheme due to close in March 2023

Corporation Tax

• The planned increase for larger UK companies corporation tax rates has been scrapped. This was due to increase to 25% but will now remain at the current level of 19%

The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. It does not constitute advice. All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor. 

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