The new Chancellor, Kwasi Kwarteng has today delivered his Emergency Budget update which sets out his plan to release potential in the British economy at a time of increased inflation and global uncertainty.

The key points of note have been included below and are based on information currently available. As always, we will keep you up-to-date with further details as they are announced.For more information, we will be releasing our Emergency Budget Summary tomorrow which goes beyond the key announcements and will look at these changes and how they will have an impact upon you, your business and your personal finance.

Key announcements for individuals

•    The planned 1.25% rise in National Insurance which was introduced in April 2022 will come to an end on 6th November. Its replacement - the Health and Social Care Levy planned for April 23 will also be cancelled.   
•    The 1.25% increase to dividend tax rates that was introduced from April 2022 will be cancelled
•    The threshold from which Stamp Duty Land Tax (SDLT) must be paid will be doubled to £250,000 for all home purchases with immediate effect.
•    The threshold at which first-time buyers begin to pay SDLT will increase from £300,000 to £425,000, and the maximum value of a property on which first-time buyers’ relief can be claimed will also increase from £500,000 to £625,000 with immediate effect.
•    The IR35 reforms which were made in 2017 and 2021 shifting the responsibility for the determination of disguised remunerations away from contractors and onto clients is being rescinded.  This will put the onus back onto the personal service companies as to whether they are caught by the legislation.

From April 2023: Income tax cut

•     The basic rate of income tax will be cut to 19p in the pound from April 2023
•     The 45% additional rate of tax (which currently applies on earnings above £150,000) will also be removed, with the higher rate of tax of 40% now being the highest rate of tax. *Please note: The 45% higher rate tax proposed in the budget has now been rescinded by the government.

Key announcements for businesses

•    The annual investment allowance will remain at £1m indefinitely.
•    The 0.75% pension charge cap will be reformed to enable pension funds to invest more easily in a wider range of UK assets.  
•    New and start-up companies will be able to raise up to £250,000 under Seed Enterprise Investment Scheme giving tax relief to investors.
•    The Enterprise Investment Scheme and Venture Capital Trust will be extended beyond 2025.
•    The current Company Share Option Plan (CSOP) limit allows businesses to offer employees share options this has now been doubled from £30,000 to £60,000

Introduction of investment zones

A series of ‘special investment zones’ have been announced. These zones will have geographical tax differences to encourage social mobility and will be in place for the next 25 years.

•    On purchases of land and buildings for commercial or new residential development, stamp duty land tax will not apply.
•    For newly-occupied business premises, there will be no business rates to pay.
•    If a business hires a new employee in the tax site, then on the first £50,000 they earn, the employer will pay no National Insurance. 

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We are here to help in any way we can - please speak to your usual Jerroms contact on 0121 693 5000 (Solihull Office), 01384 250202 (Halesowen) or 01675 466344 (Coleshill Office).