In the first budget by Jeremy Hunt, set against the back drop of a mini budget that was then virtually all retracted and a black hole in the country’s finances, there was always going to be some dramatics. Here’s our round up of the key take aways.
- State pension and means tested and disability benefits to increase by 10.1% in line with inflation.
- The 45% additional tax rate will now apply on earnings over £125,140 (excluding Scotland).
- Income tax personal allowance, higher rate threshold, main national insurance and inheritance tax thresholds are all frozen until April 2028.
- Tax Free Allowance for Dividends which is currently at £2000, will be reduced to £1000 from April 2023, and then to £500 from April 2024.
- The Tax Free Allowance for Capital Gains Tax which is currently at £12,300 will be reduced to £6000 from April 2023, and then to £3000 from April 2024.
- The Stamp Duty nil rate threshold is being held at £250,000 for all residential properties and to £425,000 for first time buyers until 31st March 2025.
- The Health and Social Care Levy that was reversed under the mini budget by Kwasi Kwarteng from November will remain. This was applied to National Insurance contributions. The increase of 1.25% was also applied to dividends – this WILL remain in place, so the rate of dividend tax will remain at 8.75%
- The Corporation Tax increase as originally planned by Rishi Sunak when he was chancellor of the exchequer in March 2022 will still go ahead. This means that from April 2023, companies with profits below £50,000 will pay Corporation Tax at a rate of 19%, and those with profits above £250,000 will pay Corporation Tax at a rate of 25%.
- Electric cars, vans and motorcycles will have to pay road taxes from April 2025
- The Energy Price Guarantee – which is the limit on the price households pay per unit of gas and electricity will increase from £2500 to £3000 per year.
Increase in minimum wage for all categories
- Apprentice Rate From £4.81 to £5.28
- 16-17 year olds From £4.81 to £5.28
- 18-20 year olds From £6.83 to £7.49
- 21-22 year olds From £9.18 to £10.18
- 23 years upwards From £9.50 to £10.42
These are just some of the headlines, for a more detailed summary you can read the full statement from the Government here. As always if you are unsure over how these changes will affect you and your business, please do not hesitate to get in touch and we’ll be happy to discuss your personal position with you.