Here are the key points from the Government's budget delivered on 23 September 2022 that effect business owners and property investors.
Our new chancellor Kwasi Kwarteng has listened to the Bank of England who has warned that our economy is probably already in a recession. The cause of this being the hangover effect from Covid-19, Brexit and the current war in Ukraine pushing up inflation and interest rates.
Prior to today's announcements below the government has already introduced the energy price caps and reversed the 1.25% increase in NIC rates, which will come into effect in November. Below are the key takeaways from the announcements today, which combined will have a £45bn worth of tax cuts to encourage economic growth.
Income Tax
From April 2023, the basic rate of income tax will be cut from 20% to 19%. This will save £124.30 for those earning £25,000.
Stamp Duty
The stamp duty land tax will be cut, with the limit raised to £250,000. This means that there is no stamp duty payable for properties up to £250,000. Also, this is increased to £425,000 for first time buyers, who are buying properties of up to the value of £625,000.
Corporation Tax
The planned increases to Corporation tax have been scrapped, meaning that it will remain at 19%.
Capital Investment
The annual investment allowance (AIA) is to remain at £1m permanently as it was set to revert back to £200,000 in March 2023. This is to encourage businesses to invest and grow.
IR35 Rules
The rules which govern off-payroll working are to be simplified. The reforms to IR35 announced back in 2017 and 2021 will be scrapped. This is welcome news for the vast numbers of contractors operating through their limited company.
Other
There was a removal of the cap on banker's bonuses.
To try and boost tourism an introduction of VAT-free shopping for overseas visitors will come into effect in 2024. This will enable them to obtain a VAT refund on goods bought in the high street, airports and other departure points and exported from the UK in their personal baggage. The mechanism through which VAT will be reclaimed is likely to be digital, rather than via paper forms.
If you would like to know more about how the budget effects your business, please contact your team member directly or email enquiries@Charterwells.co.uk.