The stamp duty land tax threshold has been raised with immediate effect and the 45% income tax rate (paid by those earning more than £150,000 per year) is to be abolished next year.
Basic income tax will be reduced by one pence to 19p per pound next year. Chancellor Kwasi Kwarteng also abolished caps on bankers’ bonuses, announced plans for more City deregulation, axed the proposed increase in corporation tax from 19% to 25%, and has confirmed the National Insurance increase to pay for the NHS and social care will be halted in November.
While the pound plunged to below $1.09 in response to the mini-budget—its lowest since 1985—Kwarteng said the measures would boost economic growth by attracting investment.
Stamp duty thresholds on residential properties will rise from £125,000 to £250,000, and £300,000 to £450,000 for first-time buyers. The ceiling for first-time buyers’ relief has been raised from £500,000 to £625,000.
Law Society president I Stephanie Boyce said ‘conveyancing solicitors will now be watching and waiting to see how the changes announced will impact their workload and businesses’.
Winckworth Sherwood partner Blair Adams said the measures ‘may relieve some of the pressure on businesses caused by rising costs in the supply chain and increased energy costs’ and ‘may also take some of the urgency out of employee demands for large pay increases’.
‘One specific employment law measure that has been announced today is the proposal to scrap the off-payroll working rules from April 2023, for both the public and private sectors. This will mean that end-user clients engaging individuals via intermediaries will no longer be responsible for determining the tax status of the arrangement and, potentially, for payments of tax.
‘Instead, the liability will fall back on the intermediary. Having spoken to end-user clients about this already, this is seen as a positive step.’
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