Emergency Budget 2022

In his first Budget speech as Chancellor, Kwasi Kwarteng said that ‘we need a new approach for a new era, focused on growth’.

He said he would build this around three priorities

• Reforming the supply side of the economy
• Maintaining a responsible approach to public finances
• Cutting taxes to boost growth

What followed certainly delivered on the third of these, this package has been described as the biggest tax cutting budget for half a century, following on from the earlier announcement of very substantial support for individuals and businesses coping with rising energy prices.

The proposals

The Chancellor also put forward a number of proposals to reduce costs and regulation for businesses, moving the levers of tax and legislation to encourage investment, employment and economic growth.

It remains to be seen whether the UK’s productivity and national income will respond in line with his aspirational target of 2.5% a year.

The other priority, fiscal responsibility, was covered in less depth. The response of the financial markets to the announcement of such substantial tax cuts was immediate: the value of the pound and the main stock market index both fell. The Chancellor put off the publication of plans to reduce government debt over the medium term, and full economic and fiscal forecasts, until later in the year.

Our Emergency Budget Summary covers the most important points and how they affect businesses and individuals.

Significant Points

• Reversal of the April 2022 increase in National Insurance rates with effect from 6 November 2022
• Cancellation of the Health and Social Care Levy that was to be introduced in April 2023
• Cancellation of the 1.25% addition to dividend tax rates that was introduced in April 2022, with effect from April 2023
• Basic income tax rate cut to 19% a year early, from April 2023
• Cancellation of planned corporation tax increase to 25% in April 2023: the rate will remain 19%
• Increases in thresholds for Stamp Duty Land Tax with immediate effect
• From April 2023, repeal of the ‘off-payroll working’ measures introduced in 2017 and 2021
• Confirmation of energy cost support packages

Read our Emergency Budget Summary

The sudden announcement of significant tax changes, makes it hard to keep track of what is changing and when, and how it affects your finances.

In our Emergency Budget Summary we have set out the latest proposals and their impact.

We will review the new proposals to ensure we offer our clients the best advice to help them remain as tax efficient as possible. And our colleagues at Carpenter Box are always on hand to help manage investments and pensions.

If you would like more detailed one-to-one advice on any of the issues raised in the Budget, please get in touch or give us a call on 01903 234094.