Chancellor of the Exchequer Kwasi Kwarteng unveiled his mini-Budget in the House of Commons on Friday. Here are the main points:
Tax and National Insurance
- Cut in basic rate of income tax to 19% from April 2023.
- 45% higher rate of income tax abolished for England, Wales and Northern Ireland taxpayers.
- One single higher rate of income tax of 40% from April 2023.
- Reversal of recent rise in National Insurance from November 6.
- UK-wide rise in corporation tax, from 19% to 25% now scrapped.
Work, investment and pensions
- IR35 rules governing off-payroll working to be simplified.
- Annual investment allowance, the amount companies can invest tax free, remains at £1m.
- Easier for pensions funds to increase UK investments.
- New and start-up businesses able to raise up to £250,000 under scheme giving tax relief to investors.
- Share options for employees doubled from £30,000 to £60,000.
- Rules which limit bankers’ bonuses scrapped.
- Government to set investment zones with 38 local areas in England, including Liverpool city region and Cheshire.
- Tax cuts and liberalised planning rules to release land for housing and commercial use.
- Investment zones offering measures such as no business rates and stamp duty waived.
- New legislation to cut planning rules.
- No stamp duty on first £250,000.
- Threshold for first time buyers rises to £425,000.
- Comes into operation immediately.
- Freeze on energy bills, which the government claims will reduce inflation by 5 percentage points.
- Total cost for the energy package expected to be around £60bn for the six months from October.
- VAT-free shopping for overseas visitors.
- Planned increases in the duties on beer, for cider, for wine, and for spirits cancelled.
- People on universal credit will see benefits reduced if they don’t fulfil job search commitments.
- Jobseekers over 50 to be given extra time with work coaches to help them return to job market.