Former Chancellor Kwasi Kwarteng took to the House of Commons on 23 September to announce his first (and last) fiscal statement.
His speech, dubbed a ‘mini-budget’, set out to address high energy costs and boost growth. But it also sparked controversy, with some of the measures announced facing criticism from both within and outside of the Conservative Party.
Just a little over two weeks after the budget, Kwarteng was replaced by Jeremy Hunt, who made it his priority to undo the majority of the changes detailed by his predecessor.
We’ve summarised the most important measures for individuals and business owners to know.
The income tax additional rate was abolished – and then it wasn’t
In a surprise measure, the Chancellor announced during his speech that the current 45% additional income tax rate would be abolished from April 2023. This would have benefitted around 660,000 people earning more than £150,000 a year.
Following backlash during the following week, however, the Government announced on 3 October it would no longer go ahead with the policy, with Kwasi Kwarteng calling it “a distraction” from the overall package of measures. This means the 45% rate will remain for additional-rate earners.
Cut to basic-rate income tax announced then reversed
In the Spring Budget earlier this year, former Chancellor Rishi Sunak announced his decision to cut the basic rate of income tax from 20% to 19% from April 2024.
In his mini-budget, Kwarteng brought this change forward a year, to April 2023. But, shortly after the replacement of Kwarteng by Jeremy Hunt, it was announced that the cut to income tax would not be going ahead.
This means workers, savers and pensioners would’ve benefit by an average of £170 a year, according to the Treasury.
National Insurance increase reversed
Another policy previously announced by Rishi Sunak was the 1.25 percentage point increase in National Insurance contributions (NICs), and the introduction of a health and social care levy at the same rate from April 2023.
The Chancellor made the decision to cancel this policy while keeping the NICs primary threshold and lower profits limit at their current level of £12,570.
This change is still set to happen and will not be reversed by the new Chancellor.
Corporation tax rise cancelled, then reconfirmed
Corporation tax (CT) was due to increase to 25% from April 2023 for company profits over £250,000, with an exemption for profits below £50,000 which would still be taxed at 19%. A tapered increase would have applied between £50,000 and £250,000.
Even though Kwarteng announced it would remain at 19%, Jeremy Hunt repealed this decision and decided to continue in raising the CT percentage.
Stamp duty land tax thresholds increased
Stamp duty land tax (SDLT) is charged when you purchase a property in England and Northern Ireland over certain thresholds.
These thresholds were increased as part of the mini-budget, as shown below:
|SDLT rate||Previous property value||New property value|
|Zero||Up to £125,000||Up to £250,000|
|2%||£125,001 to £250,000||n/a|
|5%||£250,001 to £925,000||£250,001 to £925,000|
|10%||£925,001 to £1,500,000||£925,001 to £1,500,000|
Get in touch to talk about how the mini-Budget affects you.