In what was very much believed to be a ‘Mini-Budget’, Kwasi Kwarteng, our new Chancellor of the Exchequer, unveiled a far wider range of measures than anticipated. Following on from the Prime Minister’s initial Energy Price Guarantee announcement in early September and follow up support measures for business, much of the media had already highlighted the probability of cuts to come on national insurance, corporation tax and stamp duty. These were all confirmed in the Chancellor’s speech.

What was unexpected was a further range of measures amounting to the largest package of tax cuts seen for many years. Here are some of the key takeaways:

• Headline changes will cost the government an extra £12bn this year, and £37bn the following year.
• The abolition of the 45% additional tax rate in England, Wales and Northern Ireland from 2023/24.
• Bringing forward to 2023/24 the proposed cut to basic rate tax from 20% to 19%.
• Taking dividend tax rates back to their 2021/22 levels.
• Extending the £1 million annual investment allowance permanently.
• Cancelling the corporation tax increase from 19% to 25%.

There are many different political and economic opinions on what will be the short, medium and long-term financial outcomes that will result from this ‘Mini-Budget’ that has the stated purpose of stimulating growth.

Despite the ‘Mini-Budget’ being more comprehensive, fiscal events such as these do not per se alter our current strategies and broader investment outlook as, albeit changes in UK government policy are factored into our considerations, we plan for the long-term.

The recent interest rate rises seen in the UK, Europe and the US were highly anticipated, and it is thought will continue to move upwards at least in the short-term as a measure to reduce worldwide inflationary pressures.

What will be important is the longer-term impact on the relative performance of the UK against global markets and if the new government can succeed in delivering its growth ambitions for the UK economy.

Please click here for a full summary of the ‘Mini-Budget’.

Naturally, all Budget changes that affect you personally will be picked up at our regular reviews, but in the meantime should you have any questions, then please do not hesitate to contact your adviser.

The contents of the article have been prepared solely for information purposes. The article contains information on financial products and services and such information is designed for and addressed solely to individuals seeking generic industry information. Taxation depends on your individual circumstances and may be subject to future change.