Today, our Chancellor Kwasi Kwarteng has announced the Mini Budget 2022 and some major changes that will have a considerable impact for individuals and businesses. We have summaries for you some of the most important changes following the Mini budget announcement.

We round up the new measures and what they mean for you as follow:

April’s National Insurance increase of 1.25% to be reversed from 6 November 2022- delivering on key PM pledge to cut tax burden and promote economic growth. This will mean a cut of 1.25% points for employees, employers and the self-employed, effectively reversing the uplift introduced in April 2022 for the rest of the tax year. The cut will cover Class 1 (both employee and employer), Class 1A, Class 1B and Class 4 (self-employed) NICs

Corporation tax rise planned in future is cancelled, keeping it at 19% as government sets sights on 2.5% trend rate of growth. While there was to be a new smaller companies rate introduced, for many companies this will be a welcome scrapping of an additional cost.

Basic rate of income tax cut to 19% from 20% in April 2023 – one year earlier than planned – with 31 million people getting on average £170 more per year. Those who only pay tax at basic rates will see a small reduction in tax, while those with incomes over £150k will see a more significant reduction in income tax due. While the rate has been reduced, the rate bands and allowances remain frozen.

Stamp Duty cuts will help people on all levels of the property market. Anyone Buying a house costing under £250k will pay no SDLT. Rates for purchasing above this amount remain unchanged, but those buying more expensive properties will also benefit from up to £125k at 2%, as the first-rate band is also scrapped.

The Chancellor has announced plans to abolish the IR35 off payroll working rules for the public and private sector from April 2023. Large corporate and public sector bodies which engage contractors through personal service companies will benefit from a substantial reduction in admin and tax risk. Note that this doesn’t mean that IR35 rules are going away completely, just that the compliance burden is reverting to the intermediary, which is as it was before the recent changes.

The business will no longer pay a higher level of employer National Insurance and can now invest the money as they choose.

Most employees will receive a cut to their National Insurance directly via payroll in their November pay, with some receiving it in December or January, depending on the complexity of their employer’s payroll software.

The chancellor will also announce that the 1.25 percentage point increase to income tax on dividends introduced in April 2022 will be reversed from April 2023. This will bring to the taxpayers earning dividends a saving of £345 next year.