Mini Budget 22 – A new direction

Right at the start of her new administration, Liz Truss’ Government has laid down a marker with a tax cutting Mini Budget.

A question of semantics?

What was this exactly? First billed as an Emergency Budget, then it became a Fiscal Event and finally the more friendly Mini Budget.

Whatever you want to call it, Chancellor Kwasi Kwarteng announced tax cuts and economic measures representing a huge change of direction for the new Government.

The headlines

  • With effect from 6 April 2023, the basic rate of income tax has been cut to 19% and the 45% top rate of tax for higher earners abolished, leaving 40% as the higher rate of tax.
  • The Stamp Duty threshold has been raised to £250,000 and for first time buyers it’s £425,000
  • The cap on bankers’ bonuses has been lifted
  • The planned rise in corporation tax from 19% up to 25% over the next few years has been scrapped
  • The 1.25% increase in National Insurance which came in a few months ago has been reversed from November 2022 – but seemingly leaving the 1.25% increase in Dividend tax in place until April 2023

What are the commentators saying?

Today’s Mini Budget is dividing opinion, with Dafferns Tax Partner Brian Jukes posing the question of where genius begins and lunacy ends?

Meanwhile, on Twitter…

Chancellor’s statement staggering – Martin Lewis

On Twitter, Martin Lewis of Money Saving Expert wrote “That really was quite a staggering statement from a Conservative party government. Huge new borrowing at the same time as cutting taxes. It’s all aimed at growing the economy. I really hope it works. I really worry what happens if it doesn’t.”

Martin Lewis on Twitter @MartinSLewis

Reckless and irresponsible – Rachel Reeves

Rachel Reeves, Labour’s Shadow Chancellor said the changes amounted to “A return to the trickle down of the past, not a brave new future. This is casino economics – gambling the mortgages and finances of every family in the country. It is reckless, and it is irresponsible.”

Rachel Reeves – Shadow Chancellor on Twitter @RachelReevesMPRa

Further coverage will follow as we provide our reviews and reflections on what the Mini Budget means for you, your business and your family.