This week and following a turbulent economic period, the new appointed Chancellor, Jeremy Hunt has completed a 'U-Turn' on most economic measures introduced, by his predecessor, Kwasi Kwarteng.  In our latest guide, we explain what has changed (or hasn't actually...) since the latest announcement.

IR35

Probably the most striking mini-budget announcement was the repealing of IR35 reforms, which were supposed to take effect from April 2023. This would have officially shifted the responsibility of determining whether a contract is inside or outside IR35, from the agency and employers back to the contractor. With the latest reversal, that decision will remain under the agency or employer's responsibility.

Dividend Tax Rate

This was another substantial U-Turn affecting limited companies, as the Government was scheduled to reverse the 1.25% increase in dividend tax from April 2023, bringing it back down to 2021/22 levels.

However, the planned increase in dividend tax rates will go ahead after all.
The below table illustrates how your tax rate may change from April 2023, in line with your income tax band.

More on our Dividend Tax guide.

Corporation Tax

The Government's previous plan to tax profits over £250,000 at 25% and profits between £50,000 and £250,000 at the main rate, will go ahead.

What does it mean for your company?

• Profits of over £250,000 will be taxed at 25%.
• Taxable profits between £50,000 and £250,000 will be taxed at the new main rate, which may be reduced by the Marginal Relief Scheme.
• Businesses with profits of less than £50,000 will continue to be taxed at a lower-end rate of 19%.

More on our Corporation Tax guide.

Income Tax

The basic Income Tax rate set to 20%, will not be reduced to 19%, by the next financial year.

Free VAT Scheme

The plan to implement a Free VAT scheme on UK High-Street purchases by non-residents, will be scrapped. The scheme aimed to revitalise the tourism industry,

Freeze on Alcohol Duty

The freeze on alcohol duty which was meant to take effect from February 2023, will not be implemented by next year, saving around £600 million a year.

Mini-Budget measures scheduled to go ahead

New Investment Zones across the UK

These local zones will provide various tax benefits for businesses that decide to set up their operations in these areas.

Some of the tax benefits will include 100% business rates relief, Stamp Duty Land Tax discounts, zero rates of Employers' NICs for new employees and more.

Stump Duty

Starting 23rd September 2022, the 0% Stamp Duty Land Tax (STLD) threshold will increase from £125,000 to £250,000, for all types of residential property purchases made by Non-First Time Buyers.

The 0% of STLD for First Time Buyers, will also go up from £300,000 to £425,000.

National Insurance

Back in April 2022, the government introduced an increase in National Insurance Contributions (NIC) by 1.25%, both for employees and employers. From 6th November 2022, these rates will be reversed, which means that employee NIC will be reduced again to 12% and 2%  (from 13.25% and 3.25%) and Employers' NIC will be reduced to 13.8% (from 15.05%).

Annual Investment Allowance (Capital Allowance)

Further business relief was introduced by reversing the decision to reduce the Annual Investment Allowance to £200,000, from March 2023. It will now be set to £1 million permanently.

Energy Bills

The Energy Bill Relief Scheme aims to cut wholesale energy prices for non-domestic customers by more than 50%, starting 1st October 2022 until 31st March 2023. The bill covers all private sector businesses, along with charities schools, hospitals and care homes.

More on our Energy Bill Relief Scheme guide.