The chancellors Mini-Budget- a summary

Chancellor Kwasi Kwarteng has today (Friday 23 September) unveiled his Growth Plan to release the huge potential in the British economy through a mini budget which he claimed to be the ‘biggest tax-cuts’ in a generation.

Income tax

Plans to cut income tax have been brought forward by a year. Under the previous cabinet, Rishi Sunak planned a 1p in the pound cut before the end of the parliament in 2024. This will now commence in April 2023, with hopes of benefitting 31 million people with an average reduction in tax of £170 a year.

Stamp Duty

Stamp duty holidays have not been uncommon in periods of economic instability, however the Chancellor has set out plans to permanently change stamp duty.

The threshold of how much a property has to cost before stamp duty is paid has shifted from £125,000 to £250,000. Currently, first-time buyers pay no stamp duty on the first £300,000, and that will raise to £425,000. Discounted stamp duty for first-time buyers will apply up to £625,000, an increase of £125,000.

National insurance

National insurance contributions will also see change. Whilst the government had previously planned to increase National insurance, the mini budget sees a cancellation to these plans. The treasury said that the cancellation of the 1.25 per cent rise as of the 6th of November would save 28 million people on average, £330 per year.

Energy costs

The ever looming issue of energy costs have also been included in the mini budget. Household bills will be cut by an expected £1,000 this year, with aid from energy price guarantee and £400 grant. Many of the most vulnerable households are set to recieve additional payments with hopes of protecting their savings. The governments energy plans are also expected to help reduce peak inflation.

Bankers bosuses

Caps on bankers bonuses are also being scrapped with the intent to galvanize the UK’s position as a financial services hub. The Chancellor claimed that, “All the bonus cap did was to push up the basic salary to bankers or drive activity outside Europe.”

Corporation Tax

Planned rises in corporation tax have also been scrapped. Prior to the mini budget, plans were in place to put in place 25 per cent corporation tax on businesses. On the corporation tax reform, the Chancellor said, “We will have the lowest rate of corporation tax in the G20. This will plough almost £19bn a year back into the economy.”

Investment zones

Similarly businesses in designated areas will also recieve tax cuts for 10 years, with the goal of promoting investment, jobs and growth into the regions. The government has been in talks with 38 local and mayoral combined authority areas in England about the proposed “investment zones.”

Pension fund investment

Regulations have also changed to increase investment by pension funds into UK-based assets. Regulations have changed to stimulate economic growth and encourage investment into British Science and Tech.

By Mark Adair – Correspondent, Bdaily

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