On Friday, 23rd September, Chancellor Kwasi Kwarteng revealed what the government is calling its “Growth Plan”. This involves a series of cuts and reforms, which the government proposes will encourage investment and support entrepreneurs across the UK to drive economic growth.
Whilst we will continue to review and advise our clients on the impact on the commercial stage, some key changes that will affect you and your business are:
- Corporation Tax Increased Cancelled
The planned corporation tax increase to 25% has been cancelled (for now), meaning the UK corporation tax rate will remain at 19%.
- Income Tax Rates Reduced
In April 2023 (and 12 months earlier than planned), the basic rate of income tax will be cut from 20% to 19%.
- Dividend Tax Rates
The government has also reversed the 1.25% increase in dividend tax from April 2023. The additional rate will also be removed, reducing the upper rate to 32.5% from April 2023.
- “Investment Zones” To Be Introduced
Specific areas of England could benefit from a number of time-limited tax incentives over ten years. Whilst these are still under consideration, these incentives potentially include 100% relief from business rates on newly occupied business premises and enhanced capital allowance. These “Investment Zones” will also benefit planning liberalisation and wider support for the local economy.
Yesterday, the Chancellor suggested future policies and changes – including further tax cuts – although details are yet to follow. We will keep a close eye on the latest news and developments as the Growth Plan comes into effect.