In his mini budget, the Chancellor announced, Income Tax Rate Changes, Stamp Duty Threshold rise, new Dividend Rate and Corporation tax rates.
Income Tax Rate Changes
Income tax rates The government had previously announced that there would be a cut in the basic rate of income tax, from 20% to 19%, from April 2024. This is now being accelerated so that it takes effect from April 2023.
In addition, to ‘incentivise enterprise and hard-work and simplify the tax system’, the government will abolish the 45% additional rate of income tax from April 2023. Consequently, there will be a single higher rate of income tax of 40%..
Stamp Duty Threshold rise
The residential nil rate tax threshold is increased from £125,000 to £250,000. The nil rate threshold for First Time Buyers’ Relief is increased from £300,000 to £425,000 and the maximum amount that an individual can pay while remaining eligible for First Time Buyers’ Relief is increased to £625,000. The changes apply to transactions with effective dates on and after 23 September 2022 in England and Northern Ireland. These changes do not apply to Scotland or Wales which operate their own land transactions taxes. There are no changes in relation to purchases of non-residential property.
From April 2023: • the dividend ordinary rate of 8.75% will reduce to 7.5% • the dividend upper rate of 33.75% will reduce to 32.5% and • the dividend additional rate will be abolished. As corporation tax due on directors’ overdrawn loan accounts is paid at the dividend upper rate, it will also reduce to a 32.5% charge for loans made on or after 6 April 202
Corporation tax rates
It had been previously announced that the rate of corporation tax would increase for many companies from April 2023 to 25%. This change will now not go ahead, leaving the rate of corporation tax at 19% for the majority of companies
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