Government Announce Further Changes
20th October 2022
With a different Chancellor in the driving seat once again, we have seen the government announce further changes since their ‘Growth Plan’, which was delivered on 23 September. In a statement on Monday 17 October, 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. These include (but are not limited to):
The reversal of the plan to reduce the basic rate of Income Tax from 20% to 19% from April 2023. The rate will remain at 20% ‘until economic circumstances allow it to be cut’.
Whereas the temporary 1.25% rise in National Insurance Contributions will still be removed from 6 November 2022 (and the introduction of the 1.25% Health & Social Care Levy in April 2023 will still not go ahead), the government will no longer cut the dividend tax rates and will maintain the 1.25% increase. Therefore, dividends will be taxed at 8.75%, 33.75% and 39.35%, as they are now.
However, the Stamp Duty Land Tax nil rate band for residential purchases will remain at £250,000, after being increased on 23 September 2022. The rates for First Time Buyers’ relief as increased on 23 September 2022 will also remain at these higher levels.
There are still no changes to the ‘Making Tax Digital’ initiative which is due to come into effect for Income Tax from April 2024.
Disclaimer - All information in this post was correct at time of writing.
