Mini Budget 2022

What are the main points about the emergency mini-budget 2022 that was introduced in the UK?

Main Points

  • 45% additional tax rate abolished

In a surprise move, additional 45% rate of income tax abolished for top earners from 6 April 2023.

  • Off payroll working rules to be abolished

IR35 off payroll working rules for the public and private sector to be abolished from April 2023.

  • Basic rate of income tax cut to 19%

The Chancellor Kwasi Kwarteng has brought forward by a year the cut in basic rate of income tax.

  • 25% cut in national insurance for employees and employers

The current tax year is a transitional year in which the increase has been applied to National Insurance Contributions, and it was to have become a standalone tax from April 2023.

Now, the Chancellor has announced that the charge will be scrapped and will no longer apply from 6 November 2022. The move also scraps the planned increase in Dividend Tax.

  • Dividend tax rate cut for top earners

In line with decision to abolish 45% additional tax rate, dividend tax for highest earners cut by 6.85%.

  • Annual investment allowance fixed at £1m

In a welcome move for businesses, annual investment allowance will be set at £1m on a permanent basis.

  • Stamp duty land tax slashed

The threshold for stamp duty land tax (SDLT) has doubled to £250,000 for all home purchases, with immediate effect. 

  • Corporation tax frozen at 19%

As trailed, planned 6% rise in corporation tax will not go ahead in April 2023.

For the Attention of All Clients

HMRC raises late payment interest from 11 October.

HMRC will raise interest rates on tax debt from 11 October following 0.5% increase in base rate.