Growth Plan announced in Government’s ‘Mini Budget’ cutting a range of taxes
Central to the ‘Mini Budget’ unveiled by the Chancellor today, is the Government’s new Growth Plan.
The aim of the Growth Plan is to release huge potential in the UK economy by tackling high energy costs and inflation alongside delivering higher wages and productivity.
The Chancellor explained that by tackling energy costs, this will help to bring down inflation through backing business and helping UK households.
Summary points of the Growth Plan include:
- The cancellation of the intended increase in Corporation tax, keeping it at 19% opposed to the planned increase in 2023 of 25%
- Cutting the basic rate of income tax cut in April 2023 to 19%. This is one year earlier than was previously planned. The Government estimates that circa 31 million people will be better off by an average of £170 each year.
- The reversal of the 1.25% rise in National Insurance from 6 November
- Abolishing the additional rate of income tax
- A cut to Stamp Duty Land Tax (SDLT), making the first £250,000 of a residential sale exempt. Alongside this, the level first-time buyers start to pay stamp duty is increased from £300,000 to £425,000. First-time buyers will also be able to access this relief when on the purchase of properties costing less than £625,000 as opposed to the £500,000 level. The Government claims this will lift 200,000 homebuyers out of paying the tax altogether, each year.
- New Investment Zones, intended to bring business investment and release land for the development of new homes across the country.
- Accelerating new energy and transport projects by removing restrictions
- Keeping the Annual Investment Allowance permanently at the current, temporary level of £1 million. This provides £100% tax relief to businesses on qualifying plant and machinery investments.
- The plan also includes the previously announced energy price guarantee, which was extended this week to include businesses with the Energy Bill Relief Scheme.
Whilst most of today’s announcements are UK-wide, the Scottish Government is expected to receive more than £600 million additional funding for the 2021 Spending Review period as a result of changes to SDLT and income tax. The Welsh Government will receive circa £70 million due to the changes to SDLT.
The Government confirmed it will set out further details including plans to reform business regulation, speed up digital infrastructure and increase housing supply over the forthcoming months. It is still no certain whether a full budget will take place this autumn, or whether this will be delayed now until spring 2023.
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