Warning: file_get_contents(/var/www/pkfl/wp-content/uploads/2022/09/PKF-Mini-Budget-2022-v4-1.pdf): failed to open stream: No such file or directory in /var/www/pkfl/vendor/smalot/pdfparser/src/Smalot/PdfParser/Parser.php on line 77

Mini Budget 2022: The Growth Plan

Having been promised either what was interchangeably referred to as a Fiscal Event, Mini Budget or Emergency Budget, today the Chancellor delivered the uniquely titled ‘Growth Plan 2022’. Mr Kwarteng further deviated from tradition by issuing the formal announcement in a Blue Book, rather than the traditional Red or Green.  

After a six-week leadership contest, where the incoming Prime Minister focussed on tax and growth issues throughout, many of the measures announced will not have come as a surprise. Indeed, the reductions in both National Insurance and Corporation Tax were so well trailed that the only real question was when NICs would be reduced – the answer coming the day before the main event that the reduction will take effect from 6 November, although this may take time to filter through to pay packets as payroll systems are updated.  

What will come as a surprise (and will particularly delight high earners) are the cuts in Income Tax rates to take effect from 6 April 2023. The reduction in the Basic Rate to 19% was trailed by Rishi Sunak in the Spring but this was anticipated to be a 2024 event. Of more potential significance is the scrapping of the ‘Additional Rate’ of Income Tax of 45% for earnings over £150,000 from the same date. Whilst always a likely ambition of a Conservative government, the timing was unexpected.  

Businesses too will be pleased by many of the measures announced today. Fixing the Annual Investment Allowance for qualifying capital expenditure at £1m on a permanent basis will give greater certainty.  Increases in threshold values for the Seed Enterprise Investment Scheme will help start-ups raise capital, and similar threshold increases for the Company Share Option Plan will help many businesses incentivise their staff.  

All told, today’s unique event appears to have been a ‘Good News only’ announcement in respect of taxation. It remains to be seen whether more negative news will be delivered in future, more traditional announcements.