UPDATE – 17 October
The government has announced it will reverse almost all tax measures announced in its mini budget. Plans to cut the basic rate of income tax have been shelved and support for energy bills scaled back.
Income tax – basic rate
The basic rate of income tax will remain at 20%.
UK corporation tax will go up from 19% to 25% in April 2023 after all, despite original plans for this to be cut.
The energy price guarantee now only covers this winter, and will be in place until April next year. A Treasury-led review will look at what measures should be put in place after this date.
Following the Energy Bill Relief Scheme, here are the main business highlights for salons owners and hairdressers.
Planned Corporation Tax rise shelved
Ex-Chancellor of the Exchequer, Rishi Sunak, had announced plans to increase Corporation Tax by 6% from April 2023; the new Chancellor, Kwasi Kwarteng, has cancelled this, keeping it at 19%.
National Insurance increase of 1.25% dropped
Since March, both employers and employees have seen a 1.25% increase in their National Insurance Contributions. From 6 November, this will be cancelled. This means bosses will see a reduction in the cost of labour, while staff will see less NI coming out of their wages. If you’re self-employed, you’ll pay less NI on your profits.
Basic Rate Income Tax cut by 1%
The cut in the Basic Tate of Income Tax means workers earning between £12,571 to £50,270 will pay 1p less per pound, with the 20% rate dropping to 19%. Kwarteng estimates this will help 31 million people pay about £170 a year less in tax. This cut has been introduced a year early.