Dividend allowance
The tax-free dividend allowance is unchanged at £2,000. The increase in dividend tax rates which was due to be applicable from April 2023 is scrapped.
The government is reversing the 1.25% increase in dividend tax rates applying UK-wide from 6 April 2023. Alongside the reversal of the Health and Social Care Levy, the ordinary and upper rates of dividend tax will be reduced to 2021-22 levels of 7.5% and 32.5% respectively. Due to the abolition of the additional rate of income tax, income that was previously charged at the additional rate, will now be charged at the upper rate of 32.5%. The reduction of all rates by 1.25% will benefit 2.6 million taxpayers with an average benefit of £345 in 2023-24; and additional rate payers will further benefit from the abolition of the additional rate of dividend tax.
SDLT
SDLT thresholds for residential properties in UK have increased from 23 September 2022 as below:
Residential properties: 23 September 2022 onwards
From 23 September 2022, first time buyers will not pay SDLT to pay up to £425,000 and 5% SDLT on the portion from £425,001 to £625,000. If the price is over £625,000, there is no relief available.
Personal Investment allowances (EIS, VCT, SEIS, CSOP)
The Chancellor set out his determination to make this country an entrepreneurial, share-owning democracy. He announced that the Enterprise Investment Scheme and the Venture Capital Trusts will be extended beyond 2025. The limits for the Seed Enterprise Investment Scheme and Company Share Option Plans will be increased to make them more generous. These schemes offer private investors generous tax benefits such as income tax relief, and exemption from capital gains tax and inheritance tax and they are a vital part of driving investment for new start-up companies.
Off-payroll working (IR35) reforms repealed
From 6 April 2023, the recent reforming rules for the public sector (2017) and private sector (2021) are repealed. From that date, workers providing their services via an intermediary will once again be responsible for determining their employment status and paying the appropriate amount of tax and National Insurance contributions. This will free up time and money for businesses that engage contractors, the reform also minimises the risk that genuinely self-employed workers are impacted by the underlying off-payroll rules.
Corporation tax
The corporation tax rate will remain at 19%, irrespective of the profit levels. The chancellor scrapped the increase in corporation tax rates which was due to take place from April 2023.
S.455 tax rate on directors’ overdrawn loan accounts will remain at 32.5%.
Annual Investment Allowance (AIA)
The Chancellor has announced that the £1 million level of AIA (which was due to end on 31 March 2023) has been made permanent. This means businesses can deduct 100% of the costs of qualifying plant and machinery up to £1 million in the first year.
Investment Zones
Businesses in designated areas in investment zones will benefit from 100% business rates relief on newly occupied and expanded premises. Local authorities hosting Investment Zones will receive 100% of the business rates growth above an agreed baseline in designated sites for 25 years.
In addition, businesses will receive full stamp duty land tax relief on land bought for commercial or residential development and a zero rate for Employer National Insurance contributions on new employee earnings up to £50,270 per year.
To incentivise investment there will be a 100% first year enhanced capital allowance relief for plant and machinery used within designated sites and accelerated Enhanced Structures and Buildings Allowance relief of 20% per year.
Energy Bill Relief Scheme (EBRS) for non-domestic customers
This scheme will provide energy bill relief for non-domestic customers in Great Britain. Discounts will be applied to energy usage initially between 1 October 2022 and 31 March 2023.
A similar scheme will be established in Northern Ireland, providing a comparable level of support.
The scheme will be available to everyone on a non-domestic contract including businesses, voluntary sector organisations, such as charities and public sector organisations such as schools, hospitals and care homes.
Suppliers will apply reductions to the bills of all eligible non-domestic customers. The government will compensate suppliers for the reduction in wholesale gas and electricity unit prices that they are passing onto non-domestic customers.
September 2022
LEGAL NOTICE
This is a basic guide prepared for our clients. It should not be used as a definitive guide since individual circumstances may vary. Specific advice should be obtained, where necessary.
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