The Budget Tax Table is back - again, as the new chancellor (Jeremy Hunt, in case you've lost count) announced tax-U-turns.
At this rate, FTAdviser is going to have to change our tax table from a rectangular shape to a circular one, so you can print it, cut it out and stick it to the wall with a split pin and an arrow like Wheel of Fortune.
As Hunt said in his statement earlier today: "The government has today decided to make further changes to the mini Budget.
"Firstly, we will reverse almost all the tax measures announced in the Growth Plan three weeks ago that have not started Parliamentary legislation."
Who knows where the arrow will stop on Halloween when the next spin happens? Spare a thought for people who work in payroll.
In any case we hope this summary proves helpful - at least until October 31.
| Budget October 2021 | Spring Statement 2022 | Mini-Budget September 2022 | New: October 17 | |
| Income tax and personal allowances | - | Bringing the £12,570 threshold into immediate effect. Basic rate of income tax will be cut from 20p in the pound to 19p from 2024. | Cut in the top rate of income tax from 45 per cent to 40 per cent from April 2023.Reducing the basic rate from 20 per cent to 19 per cent from April 2023 | No reduction in the basic rate of income tax from April 2023. It will remain at 20 per cent "indefinitely". |
| Dividend tax | Legislation introduced in the Finance Bill 2021-22 to raise the rates of income tax applicable to dividend income by 1.25 per cent. The dividend ordinary rate will be set at 8.75 per cent, the dividend upper rate will be set at 33.75 per cent and the dividend additional rate will be set at 39.35 per cent. | Dividend tax rates fall to 7.5 per cent for basic-rate payers, 32.5 per cent for higher-rate payers; the 38.1 per cent for additional rate taxpayers will also be removed to align with the dividend upper rate, which is being reduced to 32.5% from 6 April 2023. | No cut to dividend tax rates after all. | |
| Pension allowances | No changes to the PLA or MPAA. | - | Nothing on the LTA, MPAA or PLA | |
| Capital gains tax | From 27 October 2021, the deadline for residents to report and pay CGT after selling UK residential property will increase from 30 days after the completion date to 60 days. | - | Nothing in the 42-page Growth Plan | |
| Bank levy | Bank corporation tax rate of 25 per cent confirmed. The rate of the surcharge to be set at 3 per cent from April 2023. | - | Cap on bankers' bonuses has been removed | |
| Inheritance tax | Nothing mentioned. | - | Nothing on IHT | |
| Corporation tax | Confirmation of rise to 25 per cent | - | Cutting the 25 per cent rise back to 19 per cent. | No cut to corporation tax after all - as announced by Truss after the sacking of Kwasi Kwarteng. |
| Tax on savings interest | No changes to subscription rates. | - | No subscription rate changes; EIS has been extended | |
| National Insurance contribution | As previously announced, a 1.25 percentage point hike on all workers to help pay for a new health and social care tax (see below) | - | Repeal of the 1.25 percentage point NI hike in 2022 | This is still repealed. |
| VAT | No major changes. | Households with energy-saving materials installed will pay 0 per cent VAT on them. | No VAT for foreign visitors to the UK | No VAT-free shopping scheme for non-UK visitors. |
| Stamp Duty Land Tax | No further SDLT reliefs | SDLT cut of up to £2,500 for properties from 23 September 2022.The threshold at which first-time buyers begin to pay SDLT will increase from £300,000 to £425,000, and the maximum value of a property on which first-time buyers’ relief can be claimed will also increase from £500,000 to £625,000. | SDLT cut remains in place for now. | |
| Environmental taxes | - | Plans to remove some of the red tape around people using alternative energy sources. 5p cut in the price of petrol per litre for 12 months. | Energy Price Guarantee will cap the unit price that consumers pay for electricity and gas. The government will deliver £150 of the saving by covering the environmental and social costs, including green levies, currently included in domestic energy bills for two years. | Hunt has confirmed the energy price guarantee will only be in place until April 2023. |
| Business rates and Restart | Business rates multiplier frozen from 1 April 2022 until 31 March 2023. A new temporary business rates relief for eligible retail, hospitality and leisure buildings for 2022-23. Eligible properties will receive 50 per cent relief. A new 100 per cent improvement relief for business rates, to take effect in 2023 and be reviewed in 2028. From 1 April 2023 until 31 March 2035 targeted business rate exemptions for eligible plant and machinery used in onsite renewable energy generation and storage, and a 100 per cent relief for eligible heat networks, to support the decarbonisation of non-domestic buildings. Business rates revaluations to take place every three years, instead of five. | Confirmation of the reliefs already mentioned. | NI waiver for investment zones; | |
| Entrepreneurs' relief (Business Asset Disposal Relief) | - | - | No changes | |
| New: Health and Social Care tax | New for 2022 and beyond, a 1.25 percentage point increase will be placed on National Insurance contributions, alongside a 1.25 per cent dividend tax, in order to pay for a £86,000 cap on the cost of social care. This will, from 2023, become a separate levy to fund social care. | - | Levy to be scrapped altogether from 2023 onwards | |
| New: Residential Property Development Tax | Government will introduce a new tax from April 2022 on the profits that companies and corporate groups derive from UK residential property development. | - | - | |
| New: Employment Allowance relief | - | From April 2022, the allowance will increase to £5,000 and will affect half a million small businesses. | - | |
| IR35 | Planned changes to go ahead in 2021; 2017 changes ratified. | - | "The 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) will be repealed from 6 April 2023." - Growth Plan document, page 30. | There will now be NO reversal of off-payroll working reforms introduced in 2017 and 2021. The original changes will go ahead as planned. |
Here's to the next round of changes.
simoney.kyriakou@ft.com
