Mini-Budget Update October 2022
Posted on 20th October 2022 at 12:45
WHAT DOES THE MINI-BUDGET U-TURN MEAN FOR YOU AND YOUR BUSINESS?
On the 17th of October, the Government made some changes to the mini-budget that they announced on the 23rd of September.
What does this mean for small businesses?
Here’s a breakdown of how the mini-Budget’s original measures have been affected by the announcement.
MEASURES THAT HAVE BEEN CANCELLED OR CHANGED
Support for energy bills
The Energy Bill Relief Scheme for businesses and the Energy Price Guarantee for households were both announced last month before the mini-Budget.
The Energy Bill Relief Scheme is designed to support all business owners in England, Scotland and Wales with the rising cost of energy by applying automatic discounts to their energy usage. An equivalent scheme for businesses in Northern Ireland is also in place.
The Energy Bill Relief Scheme was initially introduced for two years, it will now only run for six months. This means that the automatic discounts applied to the energy usage of all businesses in the UK will only be in effect between 1st October 2022 and 31st March 2023.
A review will take place to assess the support that could be offered to businesses and households after both schemes end in April 2023.
Cut to the basic rate of Income Tax
The basic rate of Income Tax in England and Northern Ireland will remain at 20% rather than be reduced to 19% as announced in the mini-budget.
Instead of reducing the basic rate of Income Tax in England and Northern Ireland.
The Scottish rate of Income Tax and the Welsh Income Tax rates will continue to apply.
Reversal of tax rate increase on dividends
Income Tax charged on dividend income will remain 1.25% higher until further notice. The rate was increased in April 2022 and was due to be reversed in April 2023.
The mini-Budget had laid out plans to repeal the 2017 and 2021 reforms to IR35 legislation. However, it was confirmed yesterday that this change will not go ahead and the current rules for off-payroll working will remain in place.
MEASURES THAT HAVE NOT CHANGED
National Insurance rate increase reversal
The Chancellor confirmed that the National Insurance rate increase reversal first announced in the mini-Budget will go ahead as planned.
Annual Investment Allowance level set at £1m permanently
The limit for the Annual Investment Allowance - which had been set permanently at £1m in the mini-Budget will remain unchanged.
Full details of all budget can be found on the Government's website
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