Now Liz Truss has resigned as Prime Minister, what does this mean for Jeremy Hunt's updated mini-budget?
To make sure you’re up to date with the changes, here’s a round-up of what’s staying and what’s going...
National insurance rise is still reversing
There’s still going to be a cut in national insurance tax – which may come as a relief.
In April, national insurance rose by 1.25%, but the government is getting rid of this after 6th November. So, from this date, you may need to remove this extra tax from payslips and re-evaluate your workers’ take-home pay.
Highest tax bracket will remain in place
The government previously announced that it was getting rid of the highest tax bracket – capped at 45%.
This meant anyone earning over £50,271 would be liable to pay no more than 40% from April 2023. Now, the cut is not going ahead and the 45% bracket will remain in place.
Corporation tax is rising
Whilst the budget said that corporation tax was not going to be rising from 19% to 25%, this rise is now set to go ahead again in April 2023.
Income tax is staying the same
The basic rate of income tax will stay at 20p a year, rather than dropping to 19p.
Alcohol rates aren’t freezing
The government said they were keeping a freeze on alcohol tax for cider, beer, wine and spirits. However, this is no longer going ahead. So, alcohol rates will continue to increase.
IR35 rules will stay in place
The way contractors get their employment status and pay taxes is staying the same.
Under the rules of off-payroll working (known as IR35) organisations have been responsible for deciding a contractor’s employment status. In the mini-budget, the government said they were changing the rules.
This change would allow contractors in both the public and private sector to determine their own status. This means they’d also be responsible for calculating and paying the right amount of tax.
The current rules are now staying in place. So, responsibility will stay with the employer.
Capped energy prices only in place for six months
Pay issues are plaguing the UK – and rising energy costs aren’t helping.
To help businesses cut down their costs, the government announced it was capping businesses’ gas and electricity bills. This was part of the Energy Price Guarantee scheme.
The scheme was set to be in place for two years, but the government is now reducing this to six months. So, businesses will only be able to enjoy discounted energy prices until 31st March 2023.
There will be a review after the six months is up to see how support could continue for the businesses most in need.
Never miss an update with Peninsula
The law is complicated and constantly changing, so employers are likely to be in constant battle to stay ahead of the game.
But failing to update your policies and procedures in line with the law could irreparably damage your staff relations, your reputation, and your future.
So, it’s crucial that you stay up-to-date if you want to avoid hefty fines and legal trouble down the line...
For documentation support and advice on how to prepare for the upcoming changes, call 0800 028 2420 today for a free consultation.