Key Points to the Mini-Budget
With so much talk about the mini-budget, it can be hard to see what was actually announced. We’ve provided a summary below.
Income Tax
Cut in the basic rate of income tax to 19% from April 2023 (down by a penny)
31 million people will save an average of £170 a year, while those earning £100,000 will save £1,093
45% higher rate of income tax abolished
National Insurance
Reversal in the proposed increase in National Insurance to pay for health and social care (general taxation will now fund this)
Corporation Tax
Benefits
More stringent rules around universal credit, reducing benefits if job search commitments aren’t fulfilled
Work Investment
Annual investment allowance is now indefinitely at £1,000,000
Share options for employees doubled from £30,000 to £60,000
Stamp Duty
Cut to stamp duty - up to £250,000
First time buyer threshold now up to £425,000
Bankers’ Bonuses
The cap limiting how much bankers can be paid in bonuses has been removed
Shopping
Increase in duties on beer, cider, wine and spirits cancelled
During the mini-budget, Kwasi Kwarteng said, “For too long in this country, we have indulged in a fight over redistribution. Now, we need to focus on growth, not just how we tax and spend.” However, this has been met with backlash from the public and fellow MPs alike. Caroline Lucas, Green MP for Brighton Pavilion, responded by saying “Dealing with inequality is somehow over-generous? Does he think people choose to be poor and face disadvantage?”
Sometimes described as a windfall for the rich, the mini-budget will have far-reaching implications, having also reduced the value of the pound against the dollar to its lowest level in history. While the Energy Price Guarantee will impact inflation by at least 5%, the fall of the pound could push inflation up again.