Fiscal Statement – Growth Plan Highlights

23rd September 2022

The new Chancellor of the Exchequer, Kwasi Kwarteng, delivered his Fiscal Statement (the Statement), also known as ‘The Growth Plan’ this morning. Reported as a “mini budget”, the Statement was neither a Budget nor mini, and with interest rates at their highest in 14 years and the Bank of England reporting that it believes the economy has already gone into recession, the Chancellor has set out his ambitious aim for 2.5% growth.

In advance of the Statement, the Chancellor announced yesterday that the National Insurance (NI) rate increase (1.25%), implemented from April 2022, would be reversed in November 2022. In addition, the Health and Social Care Levy, due to be implemented from April 2023, will be cancelled, and the increase to dividend tax rates will be reversed from April 2023.

The tax announcements include:

  • Income Tax:
    • From the original Fiscal Statement on 23 September, the additional rate (45%) was set to be abolished from April 2023. However, on 3 October the Chancellor has announced that the 45% rate will not be abolished.
    • The basic rate (currently 20%) will be reduced to 19%, from April 2023
  • National Insurance:
    • The 1.25% increase in NI for both employer’s and employee’s, introduced from April 2022, will be reversed from 6 November 2022 for the rest of the 2022-23 tax year. It will also cover Class 1A, Class 1B and Class 2 and 4 (self-employed) NI.
    • Additionally, Class 1A and Class 1B (PAYE Settlement Agreement) NI rate will be set at 14.53% for the whole of the 2022/23 tax year
    • Most employees will see the increase in pay reflected in their November pay, depending on their employer’s payroll software’s capabilities. We understand that most software developers have been updating their software in anticipation of this announcement.
    • The July 2022 uplift in NI thresholds will also be retained
  • Health and Social Care Levy: due to come into effect from April 2023, but will be repealed
  • Dividend tax rates: the 1.25% increase to the dividend tax rates will be reversed from April 2023, returning the rates to 7.5% and 32.5%. From the original Fiscal Statement on 23 September, the additional rate (38.1%) was set to be abolished. However, on 3 October the Chancellor announced that the 38.1% additional rate will not be abolished.
  • Corporation Tax: the proposed rate increase to 25% from April 2023 has been cancelled. The rate will remain at 19%.
  • Stamp Duty Land Tax (SDLT) changes from today:
    • The threshold for all (currently £125k) for SDLT will increase to £250k
    • The threshold for first time buyers (currently £300k) will increase to £425k
    • First-Time Buyer Stamp Duty Relief available on properties up to £625k (currently £500k)
  • Investment zones: creation of new zones with tax reliefs for businesses, including business rates, SDLT and NI
  • Annual Investment Allowance: will remain at £1m, permanently
  • Office of Tax Simplification to be wound down, with all of HMRC to focus on simplification
  • A promise to simplify IR35 rules for off payroll workers, repealing the 2017 and 2021 changes
  • Seed EIS will be extended to £250k per year and the age limit increased to three years
  • Introduction of digital VAT free shopping for visitors to the UK
  • Duty rates for wines, spirits and beer: RPI increase will be cancelled

Further details to follow in our full summary.

Please contact Katharine Arthur, Partner and Head of Private Client, with any queries.



Katharine Arthur

Partner, Head of Private Client
+44 20 7969 5610
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