NOTE: This post has been updated in line with revisions made by incoming Chancellor Jeremy Hunt.
Amid a cost of living and energy crisis, the Chancellor announced big new measures as part of a mini-budget – what the government called a “fiscal event”.
Though this may have been a mini-budget, the announcements made weren’t any less wide-ranging than a full scale budget. Headlines included cuts in stamp duty and tightened benefits rules – but there was plenty that impacted businesses as well.
The changes announced were far-reaching, and most will impact businesses of every size, in every sector, and in every corner of the UK.
In this post, we’ll be talking you through the major changes announced in the mini-budget, and the potential impact these could have on your business.
Business Impact 1: Corporation Tax Rise
Corporation tax is paid on any corporate profits, and all limited companies must pay it. Under the plans announced, the rates of corporation tax will look this from April 2023:
|Company Profit||Amount of Corporation Tax|
|Up to £50k||19%|
|£250k+||25% (new rate)|
|£50k-£250k||25% (but could claim a ‘marginal rate relief’ meaning a smaller rate, between 19-25%)|
This means business will have to budget for, potentially, having less money in their pockets.
Business Impact 2: Reversal of National Insurance Increase
If you work with payslips, or recieve one yourself, you’ll know all about National Insurance. In April 2022, National Insurance rates went up by 1.25% – this was meant to last a year, until the Health and Social Care Levy came in April 2023.
Now though, the government has scrapped the Health and Social Care Levy. The NI increase will also be reversed from 6th November 2022.
Business Impact 3: Creation of Investment Zones
The chancellor announced around 40 investment zones. These will offer lower taxes for businesses, and for employees living or working there. Planning regulations will also be relaxed for companies who base themselves there.
We don’t have much info on where these zones will be yet, but here are some of the likely candidates:
- Greater Manchester
- West Midlands
- Thames Estuary
- Tees Valley
- West Yorkshire
Business Impact 4. Energy Bills
Rising energy prices are affecting everyone at the moment, but businesses are less shielded than the average consumer thanks to no price cap. The Chancellor announced further support for businesses who are struggling with this, through the Energy Bill Relief Scheme.
Under the scheme, the government will discount wholesale gas and electricity prices for all UK businesses for 6 months from 1st October 2022.
You shouldn’t need to contact your supplier, as discounts will be applied automatically.
The mini budget has already gone through many changes in its short existence. Businesses have welcomed the degree of stability that Jeremy Hunt’s changes have brought; however, its longer term impact remains to be seen.
No matter what regulations change, Sage software is the best-in-class solution for your business finances. Contact PKF Smith Cooper Systems today on 01332 959008, or use the enquiry form.
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