Below, we breakdown some of the announcements that may have an immediate interest for dental care providers and other healthcare and human service organisations.
The Basic Rate of Income Tax will be cut to 19% from April 2023. Currently this is paid on the first £37,699 of an individual’s income, after any tax-free Personal Allowance. See: https://www.gov.uk/government/publications/the-growth-plan-2022-factsheet-on-income-tax/income-tax-factsheet
Gift Aid for charitable relief will however remain at 20% until April 2027.
The Additional Rate of Income Tax, charged at 45% over £150,000, is also abolished from April 2023. From April 2023 onwards, the maximum rate of Income Tax will be 40%.
In addition, as the Additional Rate is abolished additional rate taxpayers will now have access to the £500 Personal Savings Allowance.
Dividend tax rates will align, so the maximum dividend tax rate will be 32.5% from April 2023.
The 0% band for Stamp Duty Land Tax on residential property is increased from £125,000 to £250,000. First time buyers also enjoy some improved thresholds. See: https://www.gov.uk/government/publications/the-growth-plan-2022-factsheet-on-stamp-duty-land-tax/stamp-duty-land-tax-factsheet
The Annual Investment Allowance, providing 100% on capital investment in plant and machinery, will be permanently set at £1m. It is currently at that level on a temporary basis.
We anticipate a number of reforms to tax-advantaged share schemes. We'll share more information as it emerges.
The Off Payroll Working reforms that applied to businesses will be reversed from April 2023. We'll share more information as it emerges.
The planned increase in Corporation Tax to 25% from April 2023 on firms making more than £250,000 is abolished. All firms will now pay the existing flat rate of tax at 19%, subject to surcharges or ring fenced rates in areas such as banking and oil and gas exploration. See: https://www.gov.uk/government/publications/the-growth-plan-2022-factsheet-on-corporation-tax/corporation-tax-rise-cancellation-factsheet
The Government is in early talks with 38 local authorities to establish Investment Zones. These will have a number of key features:
- 100% Business Rates relief on newly occupied or expanded premises.
- Full Stamp Duty Land Tax relief on land bought for commercial or residential development.
- 0% Employer National Insurance rate for earnings on new employees up to £50,270 per year. The current threshold is £9,096 apart from some specific scenarios.
- 100% First Year Capital Allowance on plant and machinery used in Investment Zones.
- 20% enhanced Structures and Buildings Allowance relief.
The temporary National Insurance increase of 1.25% is abolished for employers and employees from 6 November 2022. The replacement Health and Social Care Levy will no longer apply from 6 April 2023. See: https://www.gov.uk/government/publications/the-growth-plan-factsheet-on-cancellation-of-national-insurance-rise-and-health-and-social-care-levy/reversal-of-the-health-and-social-care-levy-factsheet
The above comes on top of the Energy Price Guarantee for domestic customers, and the Energy Bill Relief Scheme for business customers. The former fixes domestic electricity and gas at 34.0p / kWh for electricity and 10.3p / kWh for gas, inclusive of VAT, from 1 October. The latter fixes wholesale rates for business customers, with legislation to force suppliers to pass on discounts, aiming to achieve similar discounts and protection. The primary difference is that residential customers have certainty for 2 years, whereas the business scheme is scheduled to run for 6 months only in its current form.
You can find out more on domestic support here: https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022
You can find out more on business support here: https://www.gov.uk/guidance/energy-bill-relief-scheme-help-for-businesses-and-other-non-domestic-customers