Mini Budget Highlights

Autumn Statement – What Has Changed?

Text to Speech Voices

Changes have been made to this Mini Budget by the new Chancellor Jeremy Hunt. Highlights of these changes can be found in the blog Mini Budget Emergency Statement – What Has Changed?

National insurance contributions

The 1.25% rise in NI rates that have applied since April 2022 will be cancelled from 6 November. The rates will then be:

  • Employees’ Class 1 (primary) – 12% and 2%
  • Employers’ Class 1 (secondary) – 13.8%

The Health and Social Care Levy has been abandoned.

This will help almost 28 million people across the UK save £330 on average in 2023/24, with an additional saving of around £135 on average this year.

Self-employed

Self-employed taxpayers will pay composite rates of Class 4 NI for 2022/23.

The rates will be 9.73% on profits between £11,909 and £50,270 and 2.73% on profits above the upper limit.

For taxpayers with annual earnings periods, e.g. directors, the rates will be 12.73% on earnings between £11,909 and £50,270, and 2.73% on higher earnings.

For SMEs, the government predicts that the savings will be around £4,200 on average for small businesses and £21,700 for medium sized firms from 2023/24.

Income tax

The basic rate of income tax will fall to 19% from April 2023, one year earlier than previously planned.

The additional rate of 45% will be scrapped so the top rate will be 40% from April 2023.

The government states that this reduction is worth over £5 billion for workers, savers and pensioners. Also, that 31 million taxpayers will benefit in 2023/24, with an average gain of £170.

Dividends

From April 2023:

  • the dividend ordinary rate of 8.75% will reduce to 7.5%
  • the dividend upper rate of 33.75% will reduce to 32.5% and
  • the dividend additional rate will be abolished.

Tax due on directors’ overdrawn loan accounts will also reduce to a 32.5% charge for loans made on or after 6 April 2023.

These changes will apply in Scotland as the rules on dividends apply to the whole of the UK.

Corporation tax

The increase in the main rate of corporation tax to 25%, due to apply from April 2023, has been cancelled. The main rate will remain at 19%.

Capital allowances

The temporary increase to the annual investment allowance has been made permanent, meaning it will remain at £1 million and not revert to £200,000 in April 2023.

Seed Enterprise Investment Scheme

From April 2023, companies will be able to raise up to £250,000 of Seed Enterprise Investment Scheme (SEIS) investment, a two-thirds increase.

Stamp duty land tax (SDLT)

The residential nil rate tax threshold is increased from £125,000 to £250,000.

There is an immediate increase in First Time Buyers’ Relief from £300,000 to £425,000.

 First-time buyers will also see the maximum value of qualifying property increase to £625,000. 

There are no changes in relation to purchases of non-residential property.

Energy bills

Businesses

On 21 September 2022 the government announced a new scheme, the Energy Bill Relief Scheme, which is designed to cut energy prices for non-domestic energy customers, such as businesses, charities and public sector organisations.

Running for an initial six-month period, the scheme will apply to energy usage from 1 October 2022 to 31 March 2023.

Businesses are not required to take action or apply for the scheme, support will be automatically applied to bills.

The government intends to conduct a review of the scheme in three months to assess:

  • how effective it has been in giving support to vulnerable, non-domestic customers
  • which groups of non-domestic customers remain vulnerable to energy price rises
  • the extent to which the scheme could either be extended or further targeted.

Support after 31 March 2023 will be determined following the review.

Households

The Energy Price Guarantee (EPG) for households will apply from the start of October 2022. The EPG means that an average household will pay no more than £2,500 per year for each of the next two years. It comes in addition to the £400 Energy Bill Support Scheme and will save the average household at least £1,000.

Off-payroll working

The changes made to the off-payroll working rules from April 2017 and April 2021 will be reversed. From 6 April 2023 the responsibility for determining employment status will revert to the individuals doing the work.

State benefits

Universal Credit claimants who earn less than the equivalent of 15 hours a week at the National Living Wage will be required to meet regularly with their work coach and take active steps to increase their earnings or face having their benefits reduced, broadly from January 2023. Jobseekers over the age of 50 will also be given extra time with Jobcentre work coaches, to help them return to the job market.