A week is a long time in politics, never mind three!
Since our Emergency Mini Budget update on the 26th September, we have been introduced to a new chancellor in the form of Jeremy Hunt and have today learnt of the changes he plans to implement.
The most notable changes that will affect small to medium-sized businesses from an HR perspective are:
IR35
The Chancellor is to reverse the plans to repeal the off-payroll (IR35) reforms that were previously announced last month.
Income Tax
Income tax was planned to be reduced by 1p in April 2023, however, the basic rate of income tax will now remain at 20p indefinitely, meaning income tax rates will not be changed.
Corporation Tax
Corporation Tax was to be frozen at 19%, allowing companies to retain more profit. However, this will now rise to 25% for SMEs with profit of over £250k. Those under £50k will be taxed 19%.
SMEs whose profits are between £50k – £250k will get marginal relief which will see the rate taper up from 19% to 25%.
Changes will apply from 1st April 2023.
National Insurance
The planned 1.25% National Insurance cut will continue to take effect from 6th November 2022.
It has also been announced that the cap on energy prices, which was to stay in place for two years, has now only been guaranteed until April 2023, but will then be reviewed.
If you need further advice around any of these changes from an HR perspective or communicating these key changes to staff, please do get in touch.
