Mini Budget – What you need to know
You will have seen the Mini Budget announced by the Chancellor last week. There are a number of areas for our members to note.
Firstly, the Government has announced that the proposed increase in National Insurance – tagged the Health and Social Case Levy – which was to be an increase in contribution of 1.25% from April 2023 has been cancelled. Further, the increase from last April of 1.25% will end on the 6 November 2022.
Whilst there have been changes to the tax bandings and rates, these changes do not apply to staff in Scotland where those rights are reserved to the Scottish Government. The interim Finance Secretary has suggested that any changes to taxation in Scotland will form part of the normal budget process in February 2023, therefore there is currently no proposed change in income tax arrangements in Scotland.
Of most significance for a number of member companies is the repeal of IR35 regulations which changed the requirements for off payroll working. This change, introduced in April 2021 required the end user to make a determination on the taxation status of a potential contractor. From April 2023 that requirement will be removed, the Chancellor stating those workers engaged through an intermediary ‘will once again be responsible for determining their employment status and paying the appropriate amount of tax and National Insurance contributions.’
The proposed increase in Corporation Tax from 19% to 25%, due to be introduced in April 2023 has been cancelled.
The Chancellor also confirmed the details of the proposed winter energy bills support, with a non repayable discount of £400 payable over the winter months, and a cap on the standard bills of £2500 per annum.