Growth Plan 2022: What It Means For Your business
Key announcements for Northern Ireland businesses from the chancellor’s mini-budget
The Chancellor of the Exchequer, Kwasi Kwarteng, presented his Growth Plan 2022 announcement on Friday 23 September 2022. Find a summary of the key points from the mini-budget.
Help with energy costs
The Energy Bill Relief Scheme will reduce wholesale gas and electricity prices for all UK businesses, charities and the public sector like schools and hospitals. A similar scheme will be established in Northern Ireland, providing a comparable level of support.
The Energy Markets Financing Scheme will provide a 100% guarantee for commercial banks to offer emergency liquidity to energy traders.
Trade Unions
Legislation to be introduced that will require unions to put pay offers to a member vote, to ensure strikes can only be called once negotiations have genuinely broken down.
Innovation and growth
Reforms to the pension charge cap will be accelerated so that it will no longer apply to well-designed performance fees. This will unlock pension fund investment into UK assets and innovative, high-growth businesses.
The government will provide up to £500 million to support new innovative funds to attract further funding into UK science and technology scale-ups.
Bankers’ bonus
The bankers’ bonus will be scrapped. Regulatory reforms for the financial industry will also be announced by the government later in the autumn.
Investment Zones
A number of Investment Zones will be established across the UK. The government will work with the devolved administrations to ensure Northern Ireland, Scotland and Wales also benefit.
For businesses in these designated tax sites, for 10 years, there will be:
- accelerated tax reliefs for structures and buildings, and;
- 100% tax relief on qualifying investments in plant and machinery
Taxes
Income tax
The basic rate of income tax will be cut to 19p from April 2023 – a year earlier than previously planned. Currently, people in Northern Ireland, England and Wales pay 20% on annual earnings between £12,571 to £50,270.
The 45% higher rate of income tax will be abolished, so from April 2023 one single higher rate of income tax of 40% will be in place.
National Insurance
The increase in the National Insurance rate, brought in for this tax year, will be cancelled. The cut in National Insurance will take effect from 6 November 2022 at the earliest for most.
Health and Social Care Levy will also be cancelled.
See National Insurance increase reversed.
Stamp duty
Stamp duty will be scrapped for purchases of land and buildings for commercial or residential development.
From 23 September 2022, the Stamp Duty Land Tax threshold will be increased from £125,000 to £250,000. Stamp duty will therefore not be paid on the first £250,000 of a property’s value.
First-time buyers currently pay no stamp duty on the first £300,00 – this will be increased to £425,000. The value of the property on which first-time buyers can claim stamp duty relief will also rise from £500,000 to £625,000.
Corporation Tax
The planned increase in Corporation Tax to 25% from April 2023 will be cancelled. Corporation Tax will remain at 19%.
Annual Investment Allowance
The Annual Investment Allowance, which gives 100% tax relief on investments in plant and machinery, will not fall to £200,000 as planned but will remain at £1 million.
Tax system reforms
The government will sunset EU regulations by December 2023, requiring government departments to review, replace or repeal retained EU law. The IR35 rules will also be simplified by repealing the 2017 and 2021 reforms to off-payroll working.
VAT-free shopping
The government will introduce a modern, digital, VAT-free shopping scheme for non-UK visitors to Great Britain. The delivery will include modernising the scheme that currently operates in Northern Ireland and introducing a new digital scheme in Great Britain – a consultation will gather views on the approach and design of the scheme to be delivered as soon as possible.
Duties
An 18-month transitional measure for wine duty will be introduced. Draught relief to cover smaller kegs of 20 litres and above will be extended to help smaller breweries.
The planned increases in the duty rates for beer, cider, wine and spirits will be cancelled.
Shares and investments
The Enterprise Investment Scheme and Venture Capital Trusts will be extended beyond 2025. The limits for the Seed Enterprise Investment Scheme and Company Share Option Plans will be increased.
Read full details of the Growth Plan 2022
Source: nibusinessinfo.co.uk
