National Insurance Contributions
The unpopular hike in National Insurance contributions 1.25% introduced in April 2022 will be reversed from 6 November 2022. This will reduce NIC costs on earnings after this date. Crucially, the planned new 1.25% Health and Social Care Levy due to come into effect from April 2023 will also be scrapped. There will be an equivalent reduction in the rates of tax paid on dividends.
Personal Tax
From April 2023, the additional rate of income tax of 45% on earnings above £150,000 is being abolished and again with an equivalent abolition of the highest rate of tax on dividends. The basic rate tax will also fall from this date by 1% to 19%, one year earlier than planned. Additional rate taxpayers will also benefit from the £500 Personal Savings Allowance from April 2023.
Stamp Duty
Changes to Stamp Duty thresholds, effective from today, were also announced. Currently no stamp duty is due on purchases up to £125,000 and this will double to £250,000. First time buyer thresholds will increase from £300,000 to £425,000 and the value on which first time buyers can claim relief, will increase from £500,000 to £625,000.
Bankers Bonus Cap
The cap on bankers’ bonuses has been removed in a bid for the UK to be an attractive place for global financial services.
VAT-free shopping for Tourists
Kwarteng also announced that overseas visitors would now benefit from VAT free shopping and that a new modern digital scheme will be introduced.