The Chancellor has today announced his Growth Plan to tackle high energy costs and inflation. Please see below our summary of the key points:-
• Corporation tax – Corporation Tax rate to remain at 19% with the planned increase to 25% being cancelled. • Income tax – with effect from April 2023:- - the basic rate of income tax (currently 20%) will be cut to 19% from April 2023 – one year earlier than planned - the additional rate of income tax (currently 45%) will be abolished. The higher rate of income tax (currently 40%) will remain. • Stamp Duty – first time buyers will not pay any Stamp Duty up to £425,000 (up from £300,000) and the value of the property on which first time buyers can claim relief has been increased from £500,000 to £625,000. In addition, the nil rate band for non-first time buyers will be doubled from £125,000 to £250,000. • National Insurance – 1.25% rise in National Insurance to be reversed with effect from 6 November 2022. • Dividends – in line with the reversal of the 1.25% National Insurance rise, the planned rise in income tax on dividends will be cancelled with effect from April 2023. • Annual Investment Allowance (AIA) to be made permanent at £1,000,000 (previously due to reduce to £200,000 in March 2023) • VAT free shopping announced for overseas visitors • Energy Bill Relief Scheme - capping wholesale business energy prices for 6 months, providing a price guarantee equivalent to households • Planned alcohol duty rates increases will not be implemented, benefiting retail, hospitality and brewing businesses • IR35 off payroll working rules for the public and private sector to be abolished from April 2023