Legal News | 6.10.22

Does the mini-budget have a large impact on you?

The Chancellor of the Exchequer, Kwasi Kwarteng recently set out how the government would fulfil its commitment to cut taxes for people and businesses. Although described as a mini-budget, it represents some of the biggest planned tax changes we have seen in decades.

Ex-chancellor Rishi Sunak pledged to reduce tax on income within the basic rate band (from £12,571 to £50,270) from 2024; however, this change has been brought forward a year and from 6 April 2023, the rate will be reduced from 20% to 19%. The government estimates the 1% cut will benefit 31 million people with an average £170 a year reduction in tax.

Additionally, not only was it was announced that the 1.25% National Insurance Contribution increase would be reversed from November, it was confirmed that dividend rates would follow suit and from April 2023, the increase of tax rates that have applied to dividends will return to the basic rate of 7.5% and the higher rate of 32.5%.

However, we have already seen the Chancellor make a U-turn on plans to abolish the 45% additional rate of tax (paid by people who earn more than £150,000 a year) so we will hold our breath until the proposals come into force.

If the ‘not-so-mini’ budget has given you a push to get your Will and affairs in order, please get in touch with your usual Wansbroughs contact or email wealth@wansbroughs.com.