Regarding the Chancellor’s mini budget announcement today. The main announcement affecting employers probably came yesterday with the announcement of the reversal of the 1.25% increase in National Insurance which came in to effect in April. This will now be abolished from 6 November, affecting both employers and employees.
Work will need to be done in payroll teams to ensure the separate listing on payslips is taken off from this date, and employers should let their employees know that their payslips will look different, as well as the impact this will have on their final take-home pay.
The planned rise in corporation tax to 25% has been cancelled so the current rate of 19% will remain.
Annual investment allowance will remain at £1m instead of being cut to £200,000 in April 2023, as before. This is great news and should encourage investment as tax relief for investments up to £1m in plant and machinery.
The other surprise announcement was the proposal to repeal the off payroll working rules for the public and private sector from April 2023. This will remove a lot of administration and bureaucracy for employers who use contractors.
Another key point for business owners is the abolition of the 45% additional rate of tax. From April 2023 they will be paying 40% on top earnings, this will also have a knock-on effect on the dividend tax rate.
Mini Budget roudup from Ben Chaplin, Managing Director – Croner
www.croner.co.uk
