26th
Sep 2022
In Friday’s mini-budget as hoped for Chancellor Kwasi Kwarteng announced a stamp duty cut as part of the Conservative’s plans to stimulate economic growth, slash inflation and ease the cost of living catastrophe.
As from today (Monday 26th September) the stamp duty cuts are now applicable and the new threshold is now £250,000 on all homes before the SDLT comes into force from the previous £125,000 level.
First time buyers stamp duty threshold on homes now starts at over £425,000, nearly a 50 per cent increase from the former £300,000 and first time buyer’s tax relief is now available on properties up to £625,000, and is an increase from £500,000.
However there is no change whatsoever in the 3 per cent surcharge for second homes or Buy-to Let purchases.
All of the new SDLT cuts are now applicable in England and Northern Ireland
Other measures included in the Budget are:
2023’s planned Corporation Tax increase has been scrapped.
As from April 2023 the basic rate of Income Tax will be reduced to 19p from 20p and will also the 45p additional rate is to be scrapped "to attract global talent and incentivise employment."
The Chancellor also stated that the party will no longer follow past government’s policies of increasing taxes which reached the highest in 70 years, is now history and will not be continued in the government’s plan to encourage a 2.5 per cent yearly rate of growth. Hopefully the tax cuts will turn the ‘vicious cycle of stagnation’ into ‘virtuous cycle of growth.’
Kwarteng also announced new reforms to counteract property and related problems:
In the next few weeks the Levelling Up and Housing Secretary will be outlining details of the long term reform of the planning system and a new Bill “unpick” planning restrictions by simplifying processes. The government will also be fast-tracking the release of its own land to give a ‘shot in the arm’ to housing supply.
In a shorter timescale the government will pinpoint specific Investment Zones for faster development incentives with attractive tax reliefs for up to ten years, and in some cases job-generating and commercial business in those specified areas may not have to pay stamp duty.
The chancellor outlines the government’s three priorities being:
- Cutting taxes to promote growth;
- Bigger onus on responsible public finances;
- Reforming the supply side of economy.
Some of the other measures announced on Friday included:
- New regulations to reduce strikes in the most important industries
- ‘Encouragement’ with incentives to the unemployed to get back into work or could face a cut in benefits ;
- City bankers’ bonus caps are scrapped;
- Unlocking pension fund investments into specific growth projects;
- The pledge that the Bank of England’s financial independence will be kept;
- National Insurance planned hike in 2023 is scrapped;
- VAT-free shopping for overseas visitors;
- The planned duty rate increases for alcohol is also cancelled;
As well as releasing details of the government’s energy intentions, with the already announced annual household energy bills capped at £2,500 for the next two years, with the existing £400 discount starting next month.
Similar energy price caps for businesses, and the introduction of an Energy Market Finances scheme, giving banks a 100 per cent guarantee to offer liquidity loans to energy suppliers.
The overall cost for the energy bills’ measures will cost around £60 billion with the government forecasting that it will reduce inflation by around 5 per cent.
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