In a matter of weeks, we’ve had two new Chancellors and yet another about turn – this time around Corporation Tax, so after publishing on our pages about the mini-budget our new Prime Minister with her 2nd Chancellor to date did an about turn around Corporation Tax which she initially promised would not increase from 19% to 25% in April 2023.
So, what’s changed in a few weeks for you and your business.
Well, what’s not been made clear in this latest U turn around Corporation Tax is that if you’re a smaller business or one with profits of less than £50k per year then nothing will alter (well, until the next about turn!). Corporation Tax will remain at 19%.
For those company’s making profits between £50k and £250k, there’ll be a sliding scale of taxation from 19% to 25%
Those businesses with profits of £250k and over, then they’re the ones that will be taxed at 25%.
The original mini budget highlighted all of the below and today, the IR35 change has been reversed so we expect to see more “reversals or delays” on other aspects too!
- The 1.25% national insurance hike which was planned for April 2023 is to be removed
- The basic rate of dividend tax is being reduced from April 2023 from 8.75% to 7.5%
- Basic Rate Income Tax is down from 20% to 19%. Again, this change is from April 2023
- The addition rate of Income tax (45%) which was planned for earners of 150K and over has been abolished from April 2023
- The Threshold at which you start paying stamp duty has doubled from £125k to £250k
- The 2017 and 2021 reforms to IR35 self-employed rules were announced 2 weeks ago last week that they were to be scrapped which was a breath of fresh air for freelancers, but in an emergency statement on 17th October, the new Chancellor, Jeremey Hunt has reversed this and existing IR35 arrangements will remain.
Here at Aspire we’re keeping a track of changes and how they affect our clients and the business community in general. We’ll always keep you informed but if you have any particular concerns then we’re always available for a conversation.