The Chancellor of the Exchequer, Kwasi Kwarteng, announced an outline of plans to support UK businesses and households with the objective of cutting taxes to encourage growth.
This is a ‘mini-budget’ / new growth plan – a new full budget will be announced by the end of the year. Government is also reviewing the tax system for businesses and individuals. The full financial figures will be released at a later stage.
· Corporation Tax: Remains at 19% and the plans to raise it to 25% have been scrapped
· Reverse recent rise in National Insurance (NI) from 6 November (for workers and employers) Workers and employers have paid an extra 1.25p in the pound since April
· 45% higher rate of income tax abolished and one single higher rate of income tax of 40% from April next year
· Duty rates increase for alcohol – beer, wine, spirits – will be cancelled. Will also extend draught relief to cover smaller kegs of 20 litres and “to help smaller breweries”
· Bankers’ bonus cap is scrapped to drive investment in the UK
· VAT free shopping will be introduced for all overseas visitors.
Infrastructure and investment zones
· Government discussing setting up investment zones with 38 local areas in England
· Tax cuts and liberalised planning rules to be offered to release land for housing and commercial use
· Investment zones offered measures such as no business rates and stamp duty waived
· New legislation to cut planning rules, get rid of EU regulations and environmental assessments in an effort to speed up building.
FOR INDIVIDUALS/ HOUSEHOLDS
· Health and social care levy (National Insurance rise of 1.25%) to be scrapped from November 6
· Stamp duty cut – the cut raises the threshold of how much a property has to cost before stamp duty is paid, to £250,000. First-time buyers currently pay no stamp duty on the first £300,000, which will be raised to £425,000
· Basic rate of income tax cut down to 19p – bought forward by a year
· Households’ energy bills will be capped at £2,500 a year for a typical household. £400 still going to all. Most vulnerable will get additional support.