Mini Budget: How it affects individuals
23rd September 2022Today’s announcements have created much more noise than the last Budget, which took place just 6 months ago to the day. Among the series of tax cuts and economic measures, here are the main points that concern individuals:
- The recent 1.25% rise in National Insurance is to be reversed from 6 November, with the proposed introduction of the Health and Social Care levy not coming into effect next year.
- The recent 1.25% rise in dividend tax rates is to be reversed from 6 April 2023.
- The basic rate of Income Tax will reduce from 20% to 19%, from April 2023, 12 months earlier than planned.
- From April 2023, the additional rate of Income Tax will be abolished, resulting in individuals with income over £150k paying tax at 40% or 32.5% (rather than 45% and 38.1%) on non-dividend income and dividend income respectively. Therefore, current additional rate taxpayers will also benefit from the Personal Savings Allowance of £500 from next year. [Announcement now reversed].
- The level at which house-buyers begin to pay Stamp Duty Land Tax is doubled from £125k to £250k.
- First-time house-buyers will pay no Stamp Duty Land Tax on homes worth less than £450k (up from £300k).
- Investment schemes (such as the Enterprise Investment Scheme) to be extended beyond 2025.
This is only a limited list, and, no doubt, we will see many other changes to both the UK’s finances and the UK economy in the coming days/months…
Disclaimer - All information in this post was correct at time of writing.