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Spring Budget 2024

The latest Budget was an important speech for the Chancellor, Jeremy Hunt, and his Government, as he laid out key measures likely to affect his party’s success at the ballot box later this year.

Although a date for the next general election is still yet to be set, this is likely to be the last time that Mr. Hunt will have a chance to introduce significant changes to taxation and funding and so he didn’t hold back.

Before his announcement, it was unclear exactly what direction the Government would take, following caution from several think tanks about the dangers of significant tax cuts.

While the speech began by outlining the ongoing challenges of the cost-of-living crisis and its main driver, inflation, it soon turned to measures that would boost the economy and personal finances – both in the short and longer term.

The raucous noise from both benches only sought to highlight the importance of the measures announced by the Chancellor.

Mr. Hunt went on to declare that this would be a “Budget for long-term growth” and began outlining measures in the following areas:

Growth outlook and inflation

Inflation has been a double-edged sword for the Chancellor, both feeding the rising costs experienced by businesses and the general public, while also filling up The Treasury’s coffers through fiscal drag.

When he stepped into the role, the nation was experiencing one of its highest inflation rates in recent history – at more than 11 per cent – the Chancellor was pleased to announce in his speech that things were back on track.

Measures taken by the Bank of England and the Government, as well as improving global economic conditions, mean that the nation is now on target to hit the all-important two per cent in ‘months’, according to Jeremy Hunt.

The growth statistics produced by the Office for Budget Responsibility (OBR) were also more positive than expected following the Autumn Statement.

According to the OBR’s latest report, GDP growth is expected to reach 0.8 per cent – up from 0.7 per cent growth expected in November 2023.

Similarly, forecasts for 2025 and 2026 show growth will increase to 1.9 per cent and 2.2 per cent respectively. These rates are both higher than previous estimates from the Autumn Statement.

While this will be looked at as a step in the right direction, the reality remains that the UK’s long-term growth outlook remains relatively weak.

Tax relief for businesses

Previous Budgets and Statements have seen the introduction of new reliefs and reforms to existing allowances and thresholds for SMEs.

However, this latest speech seemed far more subdued. The headline increase to the VAT registration threshold to £90,000 will help some smaller businesses, but it comes after a seven-year freeze.

This means that this increase, while useful, will be largely wiped out by the impact of inflation during this period.

The newly permanent Full Expensing capital allowance will also be amended to include expenditure on leased assets, “when fiscal conditions allow”. This will create additional opportunities for businesses to reduce their Corporation Tax liabilities in future.

No further changes were announced to the R&D tax relief scheme, but businesses are already preparing for the previously announced merger of the SME and R&D expenditure credit (RDEC) scheme from 1 April this year.

The Chancellor also singled out the UK’s creative industries with a series of new tax reliefs worth £1 billion.

Eligible film studios in England will receive a 40 per cent relief from business rates for the next 10 years.

Additionally, the introduction of a new UK Independent Film Tax Credit is set to take place, alongside an increase in the tax credit rate by five per cent and the elimination of the 80 per cent cap on visual effects costs under the Audio-Visual Expenditure Credit.

Funding for enterprise and key projects

The Chancellor also unveiled a plan to bolster investment in UK firms with the introduction of a new 'British ISA', allowing individuals to invest an additional £5,000 annually in UK equities, beyond the existing ISA limits.

This initiative aims to foster a new generation of retail investors and position the UK as a global innovation hub akin to Silicon Valley.

Hunt also proposes changes to pension fund regulations, requiring disclosures of UK equity investments to promote domestic investment.

Furthermore, the Government will explore ways to simplify the process for individuals to transfer their pension funds when switching jobs.

This strategy includes compelling local authorities and defined contribution pension funds to reveal their investments in UK stocks, highlighting that currently, only four per cent of pension fund assets are invested in UK shares.

Initially outlined in the Advanced Manufacturing Plan in November 2023, the Government pledged to make the UK the premier global location for starting, expanding, and investing in a manufacturing business.

This commitment is being actualised, with the Budget detailing the next stages of implementing the £4.5 billion funding package for these sectors. This funding includes over £2 billion for the automotive industry and £975 million for aerospace, available for five years from 2025.

Property tax

It quickly became apparent during his speech that the Chancellor wanted to tackle key property issues in the UK.

He first announced that the current Furnished Holiday Lettings (FHL) tax regime would be abolished from April 2025 to encourage holiday homeowners to dispose of their properties and discourage future purchases of homes in areas of high demand.

He then went on to confirm plans to adjust Capital Gains Tax (CGT) for second and additional home sales for higher and additional rate taxpayers to bolster the housing market by reducing their CGT rate from 28 per cent to 24 per cent.

The lower rate will continue at 18 per cent for gains within an individual's basic rate band. This move aims to motivate landlords and owners of second homes to sell their properties, thereby increasing availability for various buyers, including first-time homebuyers and is expected to generate additional revenue throughout the forecast period.

Starting 1 June 2024, the Government will eliminate the Multiple Dwellings Relief, which currently provides a discount for bulk purchases under the Stamp Duty Land Tax system.

Personal tax

The individual taxpayer was very much the focus of Mr. Hunt’s speech, and he dedicated a substantial amount of his time to outlining new tax measures that would focus on putting more money into the hands of working families.

However, to fund this, the Chancellor announced that those with broader shoulders would have to bear the expense.

With this preface, he announced that the current non-dom tax rules would be replaced with a new residence-based regime.

The new regime will be implemented from 6 April 2025 and will introduce a transitional process for existing non-doms to move them on to the new system. The Government also plans to shift towards a residence-based system for Inheritance Tax (IHT).

This, and the cushion provided by higher Treasury revenues due to fiscal drag, meant that the Chancellor could once again cut National Insurance Contributions for employees and self-employed workers.

From 6 April 2024, the Government will reduce the primary rate of Class 1 employee National Insurance Contributions (NICs) from 10 per cent to eight per cent.

Additionally, it will implement an extra 2p reduction in the main rate for self-employed National Insurance, adding to the 1p reduction announced in the Autumn Statement.

Consequently, starting from 6 April 2024, the primary rate of Class 4 NICs for self-employed individuals will decrease from nine per cent to six per cent.

Reforms to the High Income Child Benefit Charge will also see the thresholds based on total household income, rather than the highest earner.

Meanwhile, the current £50,000 threshold will increase to £60,000 from April 2024 as taxpayers transition to the new system. The rate of the charge will also be halved so that Child Benefit is not repaid in full until you earn £80,000.

Closing thoughts

The Spring Budget was packed with measures that were focused more on the individual. While the Autumn Statement that preceded it offered more for businesses.

Together, they provide a framework for the upcoming election. While many may accuse the Government of trying to buy votes, many of the measures will help taxpayers with the cost-of-living crisis and support further economic growth.

This also includes further measures to extend the household support fund, freeze alcohol and fuel duty and a one-off adjustment to rates of Air Passenger Duty (APD) on non-economy passengers.

If you take the politics out of the equation (if you can) and look at the measure presented there are plenty of opportunities for businesses and individuals alike to reduce their tax bills and seek out new opportunities.

The next question on most people’s lips will be when the general election shall be called and what will the opposition’s economic measures look like.

For now, however, there are plenty of actions to take away from this Budget in the coming weeks and months.

Link: Spring Budget 2024



Autumn Statement 2023

With a General Election looming on the horizon, Jeremy Hunt rose to deliver his second Autumn Statement as Chancellor in the knowledge that his latest measures could have a substantial impact, not only on the future economic success of the nation but the electoral success of his own party.

Taking away the politics from his announcements, the Chancellor launched into his Autumn Statement with the news that inflation had more than halved this year and that the Government had fiscal headroom of up to £25 billion thanks to the additional tax receipts accrued due to rising incomes and frozen tax rates.

As the Chancellor said, the Government had taken difficult decisions to put the country back on track and prevent a recession.

This gave Jeremy Hunt a greater ‘War Chest’ and more room to deliver on the promise of tax cuts made days before by the Prime Minister.

Nevertheless, the Chancellor still had to strike a fine balance and try to not only deliver tax cuts but also financial surety and economic stability – for businesses and individuals alike.

In announcing his measures and future consultations, Jeremy Hunt concluded his speech by saying this was an “Autumn Statement for Growth” thanks to his 110 business-boosting measures.

The Economy and Inflation

Going into the Autumn Statement the Chancellor already knew that he had hit the Government’s target of halving inflation by the end of 2023.

The Office for Budget Responsibility (OBR) confirmed that the rate had already hit 4.6 per cent and would fall again to 2.8 per cent in 2024 and again to 2 per cent in 2025.

Jeremy Hunt said he would not take any risk with inflation and would continue to bring the rate down.

Whilst this is largely positive news, back in March the OBR estimated that inflation would fall to 0.9 per cent in 2024, meaning that inflation remains fairly persistent for a longer period, which could impact future decisions by the Bank of England’s Monetary Policy when it comes to setting the base rate in future.

More broadly, the latest GDP projections indicate that UK growth is more robust than anticipated this year, but not as strong as initially expected in 2024, 2025, and 2026.

The latest forecast shows that GDP growth will reach 0.6 per cent this year before rising to 0.7 per cent next year.

This means next year’s figures are down on the OBR’s previous estimates from March, which suggested growth of 1.8 per cent in 2024. In the following year, GDP growth will rise again to 1.4 per cent before growing to 1.9 per cent in 2026.

Support for Small Businesses

Having run a small business himself, the Chancellor said that he understood the pressures they faced and wanted to boost their growth and productivity.

To support those businesses in the hospitality, retail and leisure sectors, Jeremy Hunt confirmed that the 75 per cent business rates discount would be extended. The Chancellor also confirmed that he would freeze the small business multiplier for a further year.

However, his big announcement was that he would permanently extend the Full Expensing capital allowance, to provide certainty to businesses looking to invest.

Originally due to end in 2026, the establishment of this Corporation Tax relief as a permanent allowance is thought to be worth over £10 billion a year – making Full Expensing the biggest business tax cut in modern British history according to the Government.

Building on the previous Budget’s creation of Investment Zones, the Government will plan to create 12 investment zones in the spring including new areas in the West Midlands, the East Midlands and Greater Manchester.

The tax reliefs for freeports and investment zones will also be extended from five years to 10 years. Alongside this, there will be £80 million for new projects in Scotland, Wales and Northern Ireland.

Future and Innovation

Looking to the future and the UK’s fast-growing technology economy, Jeremy Hunt announced a package of funding and support for innovative businesses.

Amongst these measures was an additional £500 million funding for UK artificial intelligence (AI). The Government will invest in more "innovation centres" to help make the UK an "AI powerhouse" over the next two years.

The Chancellor is also due to publish plans to make £4.5 billion available over the next five years to unlock further private investment into strategic manufacturing sectors, including additional money for electric cars and the life sciences industry.

Many were also expecting changes to R&D tax relief, and while he quickly mentioned it in his speech the greater detail was to be found in the Autumn Statement documents.

Following previous proposals and consultation, the documents confirmed that the current Research and Development Expenditure (RDEC) and SME schemes will merge. Expenditures from accounting periods starting on or after 1 April 2024 will be eligible for the combined scheme.

This merger represents a significant simplification of tax rules, introducing unified qualifying criteria and a more transparent credit system. The hypothetical tax rate for loss-making entities in this merged scheme will be reduced from the current RDEC's 25 per cent to 19 per cent.

The threshold for additional tax relief for R&D-intensive, loss-making SMEs will also be lowered from 40 per cent to 30 per cent. This adjustment will bring about 5,000 more R&D-intensive SMEs into the relief's purview. The Government will also implement a one-year grace period, allowing companies falling below the 30 per cent R&D expenditure threshold to continue receiving relief for a year.

However, from 1 April 2024, R&D tax credit claimants will now be unable to designate a third-party recipient, except in limited cases. Additionally, new assignments of R&D tax credits will cease from 22 November 2023. Generally, R&D tax relief payments will be made directly to the claiming company, ensuring better control and expedited receipt of funds.

Assisting with the Cost of Living

A dominant factor in many people’s lives has been the cost of living due to high inflation rates. Whilst inflation has fallen, many individuals are still experiencing the daily impact of higher costs and so the Chancellor wanted to make it clear that the Government was there to support people.

Key to this was the headline announcement of a cut to the employee National Insurance rate from 12 per cent to 10 per cent from 6 January 2024. This means that individuals earning the national average wage of £35,400 will receive a tax cut in 2024-25 of over £450.

To help self-employed individuals, the Chancellor confirmed further changes to National Insurance, including the abolition of Class 2 NIC.

Currently, self-employed individuals earning over £12,570 must pay a weekly fixed rate of Class 2 National Insurance Contributions (NICs), which was set to increase to £3.70 from 6 April 2024.

At the same time, the main rate of Class 4 NICs will fall from 9 per cent to 8 per cent – providing further savings to the self-employed.

The Chancellor also confirmed that the National Living Wage (NLW) would rise to £11.44 per hour from 1 April 2024, while the NLW will be expanded to include 21-year-olds for the first time by lowering the age threshold.


The Government will uphold pensioner incomes by preserving the Triple Lock and adjusting the basic State Pension, new State Pension, and Pension Credit standard minimum guarantee for 2024-25 in accordance with the average earnings growth of 8.5 per cent.

The Government will also address the persistent issue of "small pot" pensions by initiating a call for evidence on a lifetime provider model.

This approach would enable individuals to have their contributions transferred to their existing pension scheme when they switch employers, offering more autonomy and oversight over their pension.

Jeremy Hunt said he will consult on giving pension savers a "legal right to require a new employer to pay pension contributions into their existing pension", which could provide an "extra £1,000 a year in retirement for an average earner saving from 18".

As previously confirmed, the Government will legislate in the Autumn Finance Bill 2023 to remove the Lifetime Allowance. This will take effect from 6 April 2024.

Final Thoughts

The outcome of this Autumn Statement is perhaps not surprising given the fiscal buffer available to the Chancellor going into his speech and the upcoming General Election in 2024.

While there are many benefits provided through Jeremy Hunt’s 110 measures, the devil is in the details and the reality is that many individuals and businesses will go into 2024 with concerns about costs, alongside the support being provided.

Link: Autumn Statement 2023

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Spring Budget 2023

Just a few days short of the third anniversary of the first Covid lockdown, Chancellor Jeremy Hunt rose to the Despatch Box to deliver the first full Budget to have taken place in 504 days and the first unaffected by the immediate impact of the pandemic since October 2018.

Of course, in that time, we have had several fiscal statements and mini-Budgets, but never a full Budget Statement.

In contrast to the last full Budget, gone is the financial emergency of the Covid lockdowns, gone is the immediate fallout from the ill-fated Truss-Kwarteng mini-Budget of last Autumn, and gone is the immediate threat of a winter with households and businesses crippled by astronomical fuel bills.

Against a background of Brexit, Covid and domestic political instability, Jeremy Hunt will doubtless have been hoping that the first full Budget post-Covid would mark a return to a more normal footing for politics and the economy.

However, there was still plenty for the Chancellor to deal with. Inflation, exceptionally high fuel bills, stagnant growth, economic inactivity and the post-Covid damage to the public finances have not gone away.

Those were the areas the Chancellor was expected to set his sights on as he rose to his feet.

OBR Forecasts and the Public Finances

The Chancellor began by describing his speech as a “Budget for Growth”, saying he would deliver on an aim to make the UK one of the most prosperous countries in the world by removing barriers to investment, tackling labour shortages, breaking down barriers to work and harnessing British ingenuity.

He said the Office for Budget Responsibility (OBR) expects inflation to fall from a high of 10.7 per cent in the final quarter of 2022 to 2.9 per cent by the end of 2023, achieving the Government’s aim of halving inflation.

The OBR no longer expects the economy to enter a technical recession, with the economy expected to shrink by 0.2 per cent during 2023, before growing by 1.8 per cent in 2024, 2.5 per cent in 2025, 2.1 per cent in 2026 and 1.9 per cent in 2027.

Moving to the public finances, the Chancellor said that public sector net debt is currently 100.6 per cent of GDP but is expected to fall to 94.6 per cent of GDP by 2027-28.

“Back to Work” Measures

The Chancellor said that there are currently one million vacancies in the economy and seven million adults of working age who are not currently employed. He said that encouraging more people from this group into the labour market would be vital for growing the economy.

He announced various measures designed to get people back to work, including reforms to disability and out-of-work benefits intended to remove certain constraints and disincentives to work.

He also noted that there are now three million working age people over the age of 50 who are not in work – a figure that has increased by more than 300,000 since the pandemic. To tackle this, he announced further career support for the over-50s and a dedicated program of apprenticeships to be known as “Returnerships”.

Meanwhile, the Chancellor said that five occupations in the construction sector will be added to the Shortage Occupation List, making it easier for employers to employ skilled workers from outside the UK.

Cost of Living, Childcare and Fuel Bills

Following an announcement earlier in the day, the Chancellor confirmed that the Government’s Energy Price Guarantee, which caps per-unit household energy bills, will remain in place for a further three months from April to June 2023.

The Chancellor said that this effectively continues to cap a typical household bill at £2,500 a year.

At the same time, he said that fuel duty will remain frozen and the existing temporary 5p cut will be retained for an additional year.

He also confirmed another significant measure that had been announced ahead of the Budget in the form of a commitment to extend the provision for 30 hours’ free childcare for the children of working parents to the parents of all pre-school children aged from nine months. These reforms will be phased in gradually from April 2024 to September 2025.

There will also be changes to staff-to-child ratios in nurseries and incentives for new childminders to encourage an increase in provision in the sector.

Business Taxation

The Chancellor announced two significant changes for businesses – the introduction of a new “Full Expensing” scheme to help mitigate the impact of April’s increase in the main rate of Corporation Tax, which he confirmed will go ahead, and further reforms to Research and Development (R&D) Tax Relief.

Full Expensing will be introduced from 1 April 2023, replacing the Super Deduction. It will allow companies to write off the full cost of qualifying plant and machinery investments in the year of the investment. The measure initially applies for three years but the Chancellor said he hoped to make it permanent “when fiscal conditions allow”.

The Chancellor announced a significant increase in the relief available to loss-making R&D intensive SMEs, which will now receive £27 from HM Revenue & Customs (HMRC) for every £100 of R&D investment.

The move has been prompted by reforms previously announced that will take effect from April 2023 that will reduce the rate of tax relief and tax credits available to some SMEs.

Additionally, the Chancellor announced the creation of 12 investment zones across the UK. Those in England will have access to funds worth £80 million over five years, with a five year tax offer equivalent to that available to Freeports.

The zones will be located in the East Midlands, Manchester, Liverpool, the North East, South Yorkshire, Tees Valley, the West Midlands and West Yorkshire, as well as in each of Wales, Scotland and Northern Ireland.


Few Budgets come to pass without some sort of rabbit-out-of-the-hat moment and this one was no exception.

While it had been trailed that there would be a significant increase in the Pensions Lifetime Allowance from its current level of £1 million, in a surprise move the Chancellor announced that the Pensions Lifetime Allowance would be scrapped entirely from April 2023.

At the same time, he also increased the Pensions Annual Allowance from its current level of £40,000 up to £60,000 from April 2023.


This was in many ways a return to normality for a Budget following the upheavals of recent years.

Reforms to Pension Allowances in particular may mean that business owners and senior professionals will need to revisit their tax planning to take advantage of the increased ability to save into their pension pots.

Link: Spring Budget 2023

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Autumn Statement 2022

The message from the Chancellor, Jeremy Hunt, in the days before he rose to the despatch box in the House of Commons to deliver the Autumn Statement was clear; he would be outlining billions of pounds of tax rises and spending cuts.

These spending cuts and tax rises, he said, would affect everybody and were necessary to re-establish the markets’ trust in the future health of the public finances.

What was less clear was exactly who the announcements would affect the most and how they would be impacted.

Of course, the challenges for the Chancellor extended well beyond winning the trust of the markets in relation to his stewardship of the public finances. He will also have been thinking about inflation, the cost-of-living crisis, interest rates and promoting economic growth, not to mention the political optics.

These are competing but intricately related pressures; action to address the cost of living carries with it the risk of further inflation; action to reassure the markets brings the twin dangers of not addressing the cost-of-living crisis or promoting economic growth. Different economic considerations do not exist in a vacuum.

Further underscoring the scale of the challenge, just a day earlier, the Office for National Statistics announced that inflation had reached a 41-year high of 11.1 per cent.

This followed warnings from the Bank of England’s Monetary Policy Committee, as it increased interest rates to three per cent in early November, that the UK faces a “prolonged” recession.

The only real questions concerned the detail of what the Chancellor would do. Which taxes would be affected? Will they rise now or in the future? Would tax rates rise? Would the focus be on freezing thresholds? How much pain would there be? Who would bear the brunt?

And, most importantly, would it work?

Public finances

Addressing the Office for Budget Responsibility’s (OBR) economic forecasts, the Chancellor said that the economy is now in recession and is expected to shrink by 1.4 per cent in 2023/24 before growing in 2024/25.

Meanwhile, he said unemployment is expected to rise to 4.9 per cent in 2024, up from 3.6 per cent now, before falling to 4.1 per cent the next year.

Borrowing this year stands at 7.1 per cent of GDP, according to the OBR. Debt as a percentage of GDP is expected to peak at 97.6 per cent in 2025/26 before falling to 97.3 per cent in 2027/28.

Personal tax

Beginning with personal tax, the Chancellor said that the threshold for the additional 45p rate of Income Tax will fall from £150,000 to £125,140 from April 2023.

At the same time, National Insurance, Inheritance Tax and Income Tax thresholds and Allowances will be frozen at their current levels for a further two years to 2028.

He said the Dividend Tax Allowance will fall from its current level of £2,000 to £1,000 in 2023/24 and then to £500 in 2024/25.

Turning to Capital Gains Tax, the Chancellor said the current Annual Exempt Amount will fall from £12,300 to £6,000 in 2023/24 and then to £3,000 in 2024/25.

He then turned his sights to electric vehicles, saying that a road tax will apply to them from 2025.

Finally, on personal tax measures, he said that the Stamp Duty Land Tax (SDLT) cuts announced by his predecessor, Kwasi Kwarteng, in September 2022 will end on 31 March 2025 and will not be permanent.

Business Tax

Turning to business taxes, the Chancellor said he would reduce the enhanced deduction rate for Research & Development (R&D) Tax Relief for SMEs from 130 per cent to 86 per cent of qualifying expenditure from April 2023. The tax credit for loss-making SMEs will fall from 14.5 per cent to 10 per cent.

On Business Rates, he said that the revaluation exercise will go ahead as planned in April 2023. £13.6 billion of support will be provided over five years to help businesses transition to the new bills.

He said the Business Rates multipliers will be frozen in 2023/24 and there will be extended and increased relief for businesses in the retail, hospitality and leisure sectors. That relief will increase to 75 per cent.

The National Insurance Secondary Threshold will remain at £9,100 until April 2028.

National Living Wage, Energy and Pensions

Turning to the National Living Wage (NLW) and National Minimum Wage (NMW), the Chancellor announced he would increase the rates for those aged 23 and over by 9.7 per cent to £10.42 an hour from 1 April 2023.

Meanwhile, the rate of NMW for those aged 21 and 22, 18 to 20, and 16 and 17 will rise to £10.18, £7.49, and £5.28 an hour respectively. The apprentice rate will also rise to £5.28 an hour.

Moving to address energy costs, the Chancellor said the current Energy Price Guarantee (EPG) will remain in place until April 2023, limiting typical energy bills to £2,500 per year. From April 2023, the EPG will rise to £3,000 for the typical household.

Concluding his speech with pensions, the Chancellor said that the State Pension Triple Lock will remain in place, meaning the State Pension will rise in April 2023 in line with September 2022’s rate of CPI – 10.1 per cent.


The economy is a complex and dynamic system, and there are limits to what can be known about how it will respond to any particular intervention – it is the sum of the ever-changing actions of millions of individuals.

What is more, the Chancellor only has his hands on some of the levers of economic influence, not all of them, and moving one of the levers he controls can stop him from moving another.

Mr Hunt will be hoping he has pulled the right levers by the right amount and that the factors out of his control move in the direction he wants them to.

For businesses and business owners, the impact of the changes is likely to vary considerably and a renewed focus on tax planning is likely to be needed.

Link: Autumn Statement 2022

Fiscal Statement

With a new King at the Palace and a new Prime Minister at Number 10, it was no surprise that the new Chancellor at Number 11 used his first statement to the House of Commons to signal a “new era” for fiscal policy.

It turned out to be a striking change of direction, as the Chancellor opened his speech, saying: “We will be bold and unashamed in pursuing growth, even where that means taking difficult decisions”.

Gone was the Sunak era’s post-Covid emphasis on fiscal responsibility. Instead, in what the Government dubbed its ‘Plan for Growth’, Kwasi Kwarteng set out an approach prioritising tax cuts for individuals and businesses over immediate repairs to the public finances.

The Chancellor’s assumption is that cutting tax rates will boost economic growth and so increase the overall tax take.

This was Mr Kwarteng’s first real test as Chancellor, 18 days into the job, with inflation sitting at 9.9 per cent and energy prices spiking, interest rates rising, a weakened pound, plus the economic recovery from Covid by no means complete.

Only a day earlier, the Bank of England’s Monetary Policy Committee had raised interest rates sharply by half a percentage point to 2.25 per cent – the highest level in eight years – in a bid to stave off spiking inflation.

Despite being a Fiscal Statement rather than a Budget, the policies trailed in the days and weeks running up to the speech suggested that it might prove to be more significant an event than many full Budgets.

  • Income Tax
  • National Insurance/ Health and Social Care Levy
  • IR35 Off-payroll Working Rules
  • Corporation Tax
  • Stamp Duty Land Tax (SDLT)
  • Annual Investment Allowance and SEIS
  • Investment Zones
  • Energy Bills
  • Conclusion

Income Tax

In a speech full of significant announcements, perhaps the most notable related to Income Tax.

The Chancellor announced that the Additional Rate of Income Tax, which is currently 45 per cent on income over £150,000 will be scrapped entirely from April 2023.

He then moved to bring forward the cut in the Basic Rate of Income Tax to 19 per cent planned for April 2024 to April 2023.

National Insurance Contributions/ Health and Social Care Levy

Another landmark policy of the Johnson Government was the 1.25 per cent Health and Social Care Levy paid by employees and employers to help meet the cost of social care.  


The current tax year is a transitional year in which the increase has been applied to National Insurance Contributions and it was to have become a standalone tax from April 2023.  


Now, the Chancellor has announced that the charge will be scrapped and will no longer apply from 6 November 2022.  


He said the reason for the move was to support smaller businesses, help households and boost economic growth.  

IR35 off-payroll working rules

In an unexpected move, the Chancellor announced that the reforms to the IR35 off-payroll working rules in 2017 and 2021 for individual contractors operating via personal service companies in the public and private sectors respectively would be scrapped.

The change means that it will no longer be the responsibility of the organisation engaging contractors’ services to determine whether a contractor should pay tax on the same basis as an employee. Instead, that responsibility will revert to the contractor, as was the case previously. 

Cancellation of planned Corporation Tax increase

The last Chancellor but one, Rishi Sunak, had announced a plan to increase the rate of Corporation Tax from 19 per cent to 25 per cent from April 2023 for companies with profits of more than £250,000. Those with profits of between £50,000 and £250,000 would have benefitted from tapered relief, while there would have been no increase for those with profits of £50,000 or less.

In a striking change from the previous Government’s policy, and consistent with the Prime Minister’s leadership campaign pledge, Mr Kwarteng announced that the planned increase will no longer go ahead and Corporation Tax rates will remain at 19 per cent.

He said that the rationale for the change is to encourage the investment needed to help the economy grow.

Stamp Duty Land Tax (SDLT)

In what might prove to become a tug of war between the Treasury and the Bank of England, just a day after many homeowners learned of a painful interest rate rise, the Chancellor offered substantial consolation in the form of a cut to Stamp Duty Land Tax (SDLT).

Indeed, just yesterday, the Governor of the Bank of England wrote to the Chancellor to warn him that tax cuts might mean even sharper interest rate rises.

Undeterred, the Chancellor pressed ahead with a move to double the SDLT threshold from £125,000 to £250,000 with immediate effect. For first-time buyers, the threshold will rise to £425,000 on properties of up to £625,000. The measure will apply permanently. 

Annual Investment Allowance (AIA) and SEIS

In another surprise move, the Chancellor announced that the Annual Investment Allowance (AIA) would not fall back to £200,000 in 2023 but would instead remain at its current £1 million level permanently.

Meanwhile, he said there would be a two-thirds increase in the amount companies can raise through the Seed Enterprise Investment Scheme (SEIS) to £250,000 from April 2023. At the same time, the Annual Investor Limit will rise to £200,000.

Investment Zones

The Chancellor also announced the launch of up to 40 Investment Zones. In England, he said the Government is considering time-limited tax incentives for 10 years, including 100 per cent Business Rates relief, 100 per cent first-year allowances for qualifying expenditure of plant and machinery and an enhanced Structures and Buildings Allowance.

He said the Government is also considering zero-rate Employer National Insurance Contributions (NICs) on salaries of new employees in Investment Zones up to £50,270 a year, as well as full Stamp Duty Land Tax (SDLT) relief on land and building bought for commercial or new residential development.

The Chancellor said he will work with the Devolved Administrations to offer similar incentives in Investment Zones across the UK.

 Energy Bills

Following on from the Prime Minister’s announcement on 8 September of the Energy Price Guarantee and the Secretary of State for Business, Energy, Innovation and Skills in relation to business energy costs, the Chancellor reiterated the support being offered.

He said that the Energy Price Guarantee, alongside the £400 credit already announced will cut bills by around £1,400 for a typical household in comparison to the levels they were expected to reach without Government action.

Meanwhile, he confirmed that businesses, charities and public sector organisations will benefit from equivalent relief if they had not locked into a fixed-rate tariff by April 2022. That measure will last for six months from 1 October 2022.

The Chancellor said that the Government’s intervention will reduce inflation by around five percentage points.


The speech was a dramatic statement of the fiscal philosophy being pursued by the new occupants of Number 10 and Number 11 Downing Street. They hope that by reining in energy bills and cutting taxes, consumers will be prompted to spend and businesses will be more likely to invest, ultimately benefitting the public finances through increased tax receipts.

Whether that’s likely to be the case will be a point of serious contention amongst economists and various factions of the Conservative Party, especially given rising inflation and the possible impact on interest rates. Many will see the measures as a serious gamble.

What is certain, however, is that businesses will be more interested in what actually comes to pass than any abstract debate about whether the Government is taking the best course of action.

Link: The Growth Plan 2022

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