In this article, we set out where we are on key taxes to dispel any confusion from the recent changes.
There have been a number of tax cuts announced lately that have now been reversed and other measures that have stayed the same. So, what's changed and what hasn't?
Corporation TaxThe corporation tax rate is now set to increase to 25% from April 2023 as previously and will not be maintained at 19% as was mentioned in Kwasi Kwarteng's mini-budget.
Income TaxThe planned 1% cut in basic rate of income tax has been scrapped and that has also been put on hold indefinitely.
Dividend TaxThe announced dividend tax cut of 1.25% has also been reversed. Therefore the dividend tax is still going to remain at the current rates that they are now.
Energy price cap guaranteeThe price cap guarantee will now no longer last for two years but will last for six months and be reviewed again in April 2023 with a view to making this more efficient.
VAT & DutyVAT-free shopping for tourists and the alcohol duty freeze incentives that were recently introduced have also been scrapped.
What hasn't changed from the mini budget that we had a few weeks ago?
Stamp DutyThe cut in Stamp Duty SDLT that was introduced is still in place and will continue for the time being.
National InsuranceThe cut in the national insurance. The cancelling of the 1.25% health and social care levy is still going ahead and has been reduced.
With the corporation tax rate going up, this is something that needs to be factored into plans for 2023. Secondly, with 80% of business loans tied to the bank rate. It is vital that you factor any higher interest costs into your budgets and investment decisions.
Ensure you look at your plans for 2023 and factor in potential scenarios of changes in exchange rates and any mitigation strategies around these to preserve your margins. And finally, a word on inflation. Obviously, with the cap on energy removed, this could mean that inflation could increase faster again next year. Therefore you need to be aware of this in 2023's pricing strategies and plans. Especially to watch out on long-term contracts in relation to inflation.
Do you need any assistance?
Taxation is a complex area. Get in touch with the team at Oldfield via email@example.com or call 02476673160 and we will be happy to advise on the best solutions for your business.
Please note: This article is provided for information only and was correct as at time of writing (18/10/22). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance. No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.