Chancellor Kwasi Kwarteng announced a ‘mini’ Budget on Friday 23 September 2022.
A brief overview of the changes which employers need to be aware of, are as follows:
Income tax and National Insurance (NI) contributions will both be cut.
- The basic rate is due to be cut from 20% to 19% from April 2023, instead of in 2024, as initially proposed by Rishi Sunak.
- The higher rate of 45% paid on earnings above £150,000 per year will be abolished in England, Wales and Northern Ireland. It will be replaced by one single higher rate of 40% from April 2023, paid on anything earned over £50,270 per annum.
National Insurance (NI) contributions:
- The extra 1.25% which both employers and employees have paid since April this year, will be reversed from 6 November.
- The new health and social care levy will no longer be introduced.
The changes to off-payroll working rules, brought in in 2017 (public sector) and 2021 (private sector), which placed the onus for calculating tax on employers rather than contractors, will be repealed from April 2023. The original rules will be reinforced (i.e. contractors will be responsible for assessing their own tax obligations).
Something else also worth noting…
Support for over-50s returning to work
Universal Credit claimants over 50 will be provided with additional support to help them return to the workplace. Over-50s have recently started returning to work amidst the cost-of-living crisis. They form a crucial part of our labour force with their wealth of skills, knowledge and experience which are pivotal to a business’s success, and our economy as a whole. This has been acknowledged and additional support measures will be implemented to aid their return to work.