The Impact of Mini-Budget and How Your Tax Consultant can Help?
With every new budget, various changes are introduced to different sectors. Whether you are a business owner or job holder, you are liable to pay taxes. For that purpose, keeping an eye on the budget is necessary. Understanding how these changes will impact your personal and business taxes will help in planning your finances. Hiring professionals will be the next best thing if you do not have the time or knowledge to understand every aspect of the budget and its impact on your life. A tax consultant in Hemel Hempstead will be able to assist.
A little background on the mini-budget and its present state
The mini-budget 2022 got published back in at the end of September, and it was set to have an impact on the lives of people. Due to that, professionals all across the country were preparing their tax statements accordingly. Since the replacement of the then Chancellor, additional changes have been introduced to the budget by the new Chancellor. It is time now to understand these changes and prepare accordingly. Before getting to the preparation, understanding the budget will help.
The changes that will or won’t take place according to the new mini-budget
According to the new version of the mini-budget 2022:
- From April 2023, cutting the basic income tax rate to 19% will be withheld until the economic conditions allow such a change and the government can afford it. The 20% tax rate will remain in effect indefinitely.
- The proposition of a 45% additional tax rate for high earners has been scrapped. Hence, people earning more than £150,000 will be liable to pay 45% tax.
- The rise in the corporation tax will go into effect from April 2023 and will be applied to firms making more than £250,000 profit. Companies making between £50,000 and £250,000 will also face a rise in the corporation tax.
- The rate of this increase will remain between 19% and 25% depending on the amount of profit being made.
- The rise in the dividend rate, which was implemented in April 2022, will remain in effect.
- The off-payroll working reforms from 2018 and 2021 will remain in effect.
- The VAT-free shopping scheme for non-UK visitors won’t be implemented.
- Freezing the alcohol duty rates won’t be implemented.
The points that will be retained from the previous mini-budget
The following changes and introduction of policies from the previous version of the mini-budget will remain in place:
- The National Insurance rise reversal and Health and Social Care Levy will remain
- The cuts to the Stamp Duty on Land Tax will remain.
- The energy support for the households will remain in place till April 2023.
- Announcements pertaining to Annual Investment Allowance, the SEIS scheme and CSOP plans will remain in place.
How can professional assistance help your finances?
The impact of these changes on your personal finances and the financial situation of your business can be perfectly calculated with the help of a professional only. Hence, hiring a reliable, capable and reputed Tax Consultancy in Hemel Hempstead will be wise. Your tax consultant will help you navigate through and around these changes. They have the necessary training to understand the situation and can come up with the solutions you require. For additional details on managing your taxes and finances or hiring the necessary services, please visit our website or call us.