The Chancellor has today delivered his first fiscal event to Parliament and in around 30 minutes made more tax cuts for both business and individuals than we can recall previously. It is said the reason for these changes is to stimulate economic growth. In summary the main points are:
Scrapping the planned increase in corporation tax to 25% from April 2023, companies will instead continue to pay tax at the existing 19% rate. There will be some adjustments made to the Super Deduction provisions.
Similarly, the increases in the Bank Corporation Tax Surcharge and the rate of Diverted Profits Tax will be cancelled.
The Annual Investment Allowance will permanently remain at its existing level of £1,000,000.
From April 2023 there will be improvements in both Company Share Option Plan and Seed Enterprise Investment Scheme limits.
The off-payroll working reforms introduced in 2017 and 2021 will be repealed from 6 April 2023.
Announced yesterday was the reversal from November 2022 of the increase in National Insurance contributions of 1.25% together with the scrapping of the Health & Social care levy.
Discussions with 38 Local Authorities, including Suffolk, Norfolk and Essex, are being held to establish investment zones benefiting from lower taxes, accelerated development and wider support for growth. Proposed tax benefits include full stamp duty land tax relief on land for commercial and residential development, zero employer National Insurance contributions on new employee earnings up to £50,270 per year, 100% first year enhanced capital allowances for plant and machinery and accelerated Enhanced Structures and Buildings Allowances of 20% per year.
From April 2023 the basic rate of income tax is being cut to 19% and the current top rate of income tax of 45% is being abolished, so from April 2023 the highest rate of income tax in the UK will be 40%.
To support retail and tourism a VAT free shopping scheme will be introduced for non-UK visitors to Great Britain.
From today the threshold above which Stamp Duty Land Tax must be paid will be increased to £250,000 and there will be additional support for first time buyers.