Keeping Up With The Mini BudgetOn the 23rd September, Chancellor Kwasi Kwarteng unveiled ‘the biggest tax cuts in a generation’. Since the announcements, the government has come under pressure to reverse its plans due to the impact they have had on the financial market.Following Kwasi Kwarteng being removed from his position as Chancellor on Friday 14th October, Liz Truss has now announced a U-turn on this mini-budget.So, what was announced in September’s original mini-budget, and what has now changed?Corporation TaxIn March 2021, the government announced the rate of corporation tax paid on company profits would rise from 19% to 25%, starting in 2023. The rise was intended to help the economy recover post-pandemic.They then announced that it would in fact be frozen at 19%, in September’s mini budget, after intense pressure from Conservatire MPs and the wider market.However, in Liz Truss’s announcement on Friday 14th October, she has now announced plans to scrap this corporation tax freeze and return to the originally planned increase to 25%. This move is estimated to increase public finances by £18 billion.At the press conference she said: “So the way we are delivering our mission right now has to change. We need to act now to reassure the markets of our fiscal discipline. I have therefore decided to keep the increase in corporation tax that was planned by the previous government.”Income TaxIn September the government announced:There would be a cut to the basic rate of income tax in April 2023, from 20% to 19%. They estimate 31 million people will get £170 more a year as a result of this cut.They would be scrapping the 45% higher rate of income tax, paid by people earning more than £150,000, replacing it with a single higher rate of 40%. However, following backlash from this announcement the government made a U-turn and the higher rate will no longer be reduced (as announced on the 3rd October).National InsuranceThe 1.25% rise in NI was planned to take place from the 6th of November, under ex-Chancellor Rishi Sunak, in order to help the NHS recover from the past few years. However, this will now also be reversed, following Liz Truss’ pledge during the Tory leadership race. This change will save an estimated £330 for 28 million people per year and can be expected in employees pay packets between November and January. The more you earn, the more you will benefit from the change. For example, if you earn £20,000 you will save approximately £93 a year, and if you earn £100,000 you will save £1,093.An estimated 920,000 businesses will also receive a tax reduction of nearly £10,000.The Health and Social Care Levy to help rebuild the NHS will not be introduced.IR35 Off-PayrollThe government announced that IR35 rules which govern off-payroll working will be simplified. As of the 6th April 2023, IR35 rules will largely return to how they were from the 6th April 2000.Off-payroll variants for the public sector from the 6th April 2017, and for large private sector organisations from the 6th April 2021, will both be scrapped.It will be up to company directors to decide whether there will be an employment relationship between the worker and engager, if all of the intermediaries in the chain were ignored.The Chancellor has said that compliance will be kept under review, due to the potential of revenue loss due to non-compliance.Investment IncentivesThe amount companies can invest tax free (Annual Investment Allowance) will remain at £1 million, for an undefined period. This allowance provides a 100% tax deduction for up to £1 million of plant and machinery purchased in a year, which was initially set to reduce to £200,000 on the 1st April 2023. The rates of super deductions will be adjusted to take into account the corporate tax rate being maintained at 19%.Shares for EmployeesShare options for employees have doubled from £30,000 to £60,000, under the Company Share Option Plan Scheme (CSOP) from April 2023.Work and InvestmentChanges to regulations will be made so that that pension funds can increase UK investmentsUnder a new scheme giving tax relief to investors, new and start-up companies can now raise up to £250,00Stamp DutyThere will be cuts to stamp duty paid when buying property in England and Northern Ireland. No stamp duty will be paid on the first £250,000, with that amount rising to £425,000 for first time buyers.EnergyThere will be a freeze on energy bills, hoping to reduce inflation by 5%. The total cost for the energy package is expected to be approximately £60 billion for six months from October.Infrastructure and InvestmentThe government is discussing setting up investment zones across 38 local areas in England, with removed business rates and waived stamp duty. Tax cuts and liberalised planning rules will be offered to release land for housing and commercial development, including new legislation to get rid of EU regulations and environmental assessments. ShoppingIn a bid to increase tourism overseas visitors will no longer be required to pay VAT when shopping in the UK. The planned increase to alcohol duty will also be cancelled.BenefitsThere have been several changes to benefits, including:A tightening of the rules around Universal Credit, reducing benefits for those that do not fulfil job search commitments.Jobseekers over the age of 50 will be given extra time with work coaches to help them return to work.Approximately 120,000 people currently on Universal Credit and in part-time work will be asked to seek more work or have their benefits reduced. This rule will apply to those who are earning less than the equivalent of 9 hours a week, and will rise to 15 hours a week from January 2023. UnionsThere are plans to introduce Minimum Service Levels when there are public transport strikes, to ease complications as a result of the strikes, as well as new legislation which will require unions to put all pay offers to a member vote before any strikes can be held.Bankers’ BonusesThe rules which limit bankers’ bonuses have been scrapped, with a package of regulator reforms to be set out later this autumn.Get More Business Blogs Like ThisLike Us On Facebook | Follow Us On Twitter | Follow Us On LinkedInAccountancy FirmAccountant LiverpoolBudget U-turnBusiness SupportLiverpool BookkeeperLiverpool Xero AccountantPayroll AccountantThe Mini BudgetXero Accounting UKXero Certified Accountant Previous PostIs It Time To Review Your Mortgage?Next PostThe Energy Bill Relief Scheme