The Chancellor of the Exchequer, Kwasi Kwarteng, has just announced a whole load of tax cuts for the UK – lots of reversals of previous increases are included in this.   The main points are shown below:

  • The proposed rise in corporation tax will be scrapped, and will not rise to the previously proposed 25% in April 2023 but instead remain at 19%.
  • The 45% higher rate of income tax will be abolished
  • The basic rate of income tax will be cut to 19% from April 2023
  • The national insurance increases that came into effect on 6th July 2022 will be reversed from 6 November 2022 (this was announced yesterday)

Other measures include an energy price guarantee freezing domestic bills at £2,500, a doubling of the house buyers stamp duty limit to £250,000 and scrapping the cap on bankers’ bonuses.

The Chancellor hopes that these measures will support growth in the economy – giving a goal of anual growth of 2.5% in the medium term, with more house buying and more companies trading in the UK as it now has the lowest rate of corporation tax in the G7.

The Treasure has stated that the reversal of the national insurance increase will mean that nearly 28 million people will save on average £330 per year.

Let’s hope that we can all see that saving!

And Good luck to the payroll software companies who need to make sure their payroll software reflects the recent reversal of changes in NI.