The Growth Plan, as set out by the then Chancellor of the Exchequer, Kwasi Kwarteng, on Friday 23rd September, included a number of substantial tax announcements, however, almost all of these have now been reversed.
The new Chancellor of the Exchequer, Jeremy Hunt, yesterday, Monday 17th October, brought forward a number of measures from the 31st October’s Medium-Term Fiscal Plan that will help to ‘sustain fiscal sustainability’.
In his statement, the Chancellor announced that the following tax policies will no longer be taken forward:
It has been confirmed that Corporation Tax will increase to 25% from April 2023 as already legislated for.
Companies with taxable profits of £50,000 or less will still only have to pay 19%. However, for companies who generate taxable profits between £50,001 and £249,999, there will be a marginal rate of tax between 19% and 25%; the closer your taxable profits get to £250,000 the higher this will be until £250,000 is reached. We will advise on the marginal relief fractions in due course.
Companies who generate taxable profits of £250,000 or more will have to pay 25% on all of their taxable profits.
The repeal of the 2017 and 2021 reforms to the off payroll working rules (also known as IR35) from April 2023 have been cancelled. The reforms will now remain in place.
The planned cut to the basic rate of income take to 19% from April 2023 will no longer take place.
The basic rate of income tax will therefore remain at 20% indefinitely.
The Government will no longer be proceeding with the abolishment of the 45p income tax rate for earners over £150,000.
The cutting of the dividend tax rates by 1.25% from April 2023 will no longer take place.
The 1.25% increase, which took effect in April 2022, will now remain in place.
If you have any questions or queries regarding any of the above or are unsure of how these measures may affect you, please do not hesitate to contact the office on 01827 54944.
Abbey Ricketts ACMA CGMA