The new Chancellor announced his ‘mini-budget’ today.

Following on from the government’s recent action on energy prices, and the Bank of England’s interest rate increase, the mini-budget announced a raft of tax cuts and reversals.

Some of the key highlights are:

• The basic rate of Income Tax will be cut to 19% (from 20%) from April 2023.
• The higher rate of Income Tax of 45% will be abolished.
• The National Insurance hike (1.25%), announced in April, will be reversed from 6 November.
• Stamp duty to be cut. Nothing will be paid for the first £250,000 of property’s value, and the threshold for first-time buyers has increased.
• The planned rise in Corporation Tax (to 25% from 19%) next year is cancelled.
• New ‘investment zones’ are to be announced, with a raft of tax incentives to be available to businesses in these areas.
• The Annual Investment Allowance is to remain at £1m, rather than returning to the old allowance of £200,000.
• There will be a repeal of IR35 from 6 April 2023.

Alongside these tax changes, the government has announced the closure of the Office of Tax Simplification, a move that seems at odds with a need to make the tax system more streamlined.

Any potential changes to Inheritance Tax are currently on hold, though Liz Truss has vowed she would oversee a review if she became Prime Minister.

The cuts to Income Tax, and the cancellation of the increase in Corporation Tax, will no doubt be welcome, but these largely impact profitable businesses, and those earning a significant wage.

Support for small, and potentially struggling, businesses, remains relatively non-existent.

For farmers, the new Defra team has announced they are looking at ‘all options’ to provide support. Those in the sector will be keeping their fingers crossed that ‘looking’ becomes action, sooner rather than later.

In the mean time, it is important to remain vigilant in your business. Read our guide to why enterprising is more important than ever, or speak to us about our accounting services today.