Graham McNeill - Lambert Chapman PartnerWith a Budget Speech, it’s normal that the majority of the detail has already been leaked beforehand, something I always struggle to understand.  With regards to today’s 2022 mini-budget – I was shocked at the package of tax cuts announced that were not perhaps expected.

Help is urgently required for both individuals and businesses and it looks like this will be received. How this will be repaid is for another day it seems…

I’m glad the Chancellor mentioned that the energy price guarantee will limit the unit price and not the total price. The £2,500 is not the price guarantee, but only an estimate for a typical house – there is no cap on the amount you could pay.

As expected and previously announced, the National insurance recent increase will be reversed at the first available date being on 6th November, so seems likely for owner managed businesses that no dividends will now be paid until 6th November.

Income tax cuts that may have been expected were taken a step further, not only reducing the basic rate income tax from 20% to 19% but also with the abolishment of the 45% additional rate band. This was unexpected and may be viewed as tax cut for high earners who perhaps aren’t feeling the full effects of the costs of living crisis.  With thresholds remaining frozen and wages increasing, many people may find themselves pushed into the higher rate bracket.

I’m pleased that next years planned Corporation Tax increase will be cancelled. From 2023, businesses making profits over £250k would have been paying Corporation tax of 25% but now remain at 19%, hopefully to encourage business to reinvest, increase employment and raise wages.

Good news for house buyers with no stamp duty payable on house purchases on the first £250k and first time buyers threshold increased to £425k. My initial thoughts are that this would just increase house prices!

Other small areas to note – duty frozen on beer, wine, cider and spirits which was expected to rise in line with RPI. Will this stop the continued increase of a price of beer in the pub?

Should the Chancellor have done more with regards to VAT? Should VAT have been reduced on energy bills or within the pub and restaurant sectors? No doubt these sectors that are already feeling the hit of the cost of living crisis could be hardest hit during a recession.

Far too much emphasis within the mini-budget has been on growth. Was this budget for growth or to try and limit the effects of an impending recession?

Graham McNeill – Partner

Lambert Chapman Chartered Accountants

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

By submitting your details you agree to receive email marketing from Lambert Chapman and have read and understood our Privacy Notice. You can withdraw your consent or change your preferences at any time by emailing us or by clicking the link at the bottom of every email we send you.

You have Successfully Subscribed!