Here are some of the highlights from the Government’s Growth Plan announced by the Chancellor of the Exchequer on 23 September 2022.

Stamp Duty Land Tax (SDLT)

From midnight on 23 September 2022:

  • The Residential nil-rate threshold increases from £125,000 to £250,000.
  • The Nil-rate threshold for First Time Buyers’ Relief increases from £300,000 to £425,000.
  • The maximum amount that an individual is able to pay for a home while remaining eligible for First Time Buyers’ Relief, increases from £500,000 to £625,000.

These measures apply to the purchase of Residential property in England and Northern Ireland only.

National Insurance Contributions (NICs)

From 6 November 2022 (or as soon as payroll systems can be changed, if later)

  • The 1.25% increase in NICs rates which has applied since 6 April 2022 is reversed.
  • Employee rates will return to 12% and 2%, with an employer’s rate of 13.8%.
  • The Self-Employed rate will return to 9% and 2%.
  • The Health and Social Care Levy, due to be implemented in April 2023, is abolished.

Transitional rates will apply to deal with the mid-year change for NIC rates that apply annually (including for company directors).

Personal Tax

From 6 April 2023:

  • The basic rate of Income tax will reduce from 20% to 19%.
  • The additional rate of Income Tax of 45% is to be removed, meaning that the top rate of tax will be 40%.
  • The 1.25% increase in the dividend rates is to be reversed. Rates revert to 7.5% and 32.5%.
  • The additional rate of tax on dividends will also be removed.

Corporation Tax

  • The planned increase in Corporation Tax from 19% to 25% in April 2023 is reversed.
  • The 19% rate will continue to apply.

Annual Investment Allowance (AIA) (Capital Allowance)

  • The planned reduction in the AIA limit to £200,000 from 1 April 2023 will be scrapped.
  • The AIA limit will to be permanently set at £1 million.

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