BATTLE households will benefit from a range of measures – including tax cuts – announced in today’s mini-budget.
There were 30 mega money policies announced by Chancellor Kwasi Kwarteng to boost the economy and tackle the cost of living crisis.
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He unleashed the biggest tax cut since the 1980s to make millions of households better off within weeks.
Mr. Kwarteng said: “We will now and in the future provide higher wages and more opportunities and fund public services.”
In other mini budget developments…
It comes as the government has already announced that the energy bills will be frozen for £2,500 for two years from October 1.
But the government today announced more measures to help households as the pressure continues.
From large businesses to the self-employed to households struggling to make ends meet, here are all the announcements you need to know — and how they affect you.
Stamp duty reduced
Budding buyers looking to buy a new home will benefit from a stamp duty discount.
Stamp duty land tax (SDLT) is a lump sum that you must pay when purchasing real estate above a certain threshold.
Previously, no stamp duty was paid on the first £125,000 of a property purchase.
But to start a revolution in home buying, the chancellor confirmed the threshold for paying stamp duty will shoot up to £250,000 from tonight.
Novice buyers will also benefit greatly from the relief.
Currently new buyers do not pay stamp duty on the first £300,000 of a property purchase, but this threshold is being raised to £425,000.
The government will also increase the value of the property that first-time buyers can claim exemption from from £500,000 to £625,000.
Raising the thresholds at which you pay the tax could save some buyers thousands of pounds.
National Insurance increase reversed
Millions of households have a tax cut worth hundreds of pounds after the chancellor reversed the increase in national insurance.
national insurance increased by 1.25 percentage point in April of this year, a jump from 12% to 13.25%.
But in a major turnaround, Mr. Kwarteng announced that this would be reversed, with the changes taking effect from November 6 this year.
He said: “Reversing the levy will provide a tax cut for 28 million people, worth an average of £330 a year.”
The exact amount you save will depend on how much you earn.
Personal finance experts at Hargreaves Lansdown make up the numbers for The Sun on how much different earners will save:
- Those with £20,000 save £93 a year
- Individuals making £30,000 a year save £218 a year
- Those with £40,000 save £343 a year
- Those with £50,000 save £468 a year
- Individuals with £60,000 save £593 a year
- Lower earners, on less than £12,570 a year, will not benefit from the change
Alcohol price increases canceled
Boozers got a huge boost as alcohol price hikes were scrapped.
Gamblers should take advantage of this as this is expected to stop the price of pints.
Increases in excise tax rates on beer, cider, wine and spirits “are all being cancelled,” Kwarteng said.
It comes as experts have predicted that the price of a pint could rise to as much as £14 while the boozers and brewers succumb to rising costs and bills.
Huge boost for freelancers
A major tax hike for self-employed workers is expected to help them save money and reduce red tape for employers.
The controversial IR35 tax rules will be abolished from April next year, which will apply to self-employed persons who have established themselves as private companies.
This includes self-employed workers such as delivery drivers, contractors and many others who primarily work for other companies that are not on the payroll.
Under the current IR35 system, you don’t determine your tax status – the company you work for does that.
It means that self-employed people often incur unnecessary costs – and IR35 is blamed for employers swiping with the help of freelancers to avoid a large tax bill.
Universal Credit Changes Revealed
About 120,000 on universal credit face stricter rules if they don’t work enough hours.
People who work the equivalent of 12 hours or less a week at the National Living Wage must look for more or better paid work.
But this requirement will now increase to 15 hours per week, Mr. Kwarteng said.
If you don’t follow the new rules, your payments could be affected – they could be cut or even stopped altogether.
It means you have to do more to increase your income or you risk losing your benefits.
Income tax reduction
Around 31 million people will get £170 back in their pockets after Mr Kwarteng big tax cut.
He confirmed a 1 pence cut in the basic income tax rate, to be introduced in April next year.
It means that the base rate of income tax you pay in the pound will drop from 20p to 19p.
The reduction in the basic income tax rate will apply to people earning between £12,571 and £50,270.
Data provided by Blick Rothenberg suggests it will store the following:
- Those who earn £15,000 a year £24.30 a year
- Those making £25,000 a year save £124.30
- Workers earning £35,000 a year save £224.30
- Those making £50,000 a year save £374
Employees only start paying income tax once they start earning more than the personal deduction – which currently stands at £12,570.
All income up to £12,570 is tax free.
What else was announced?
A planned walk in Corporation tax was removed from the mini-emergency budget.
It would rise from 19% to 25% in April.
The tax cut was introduced to boost investment by major companies in Britain.
It could also help consumers – tax cuts could be passed from businesses to shoppers.
New investment zones will be established in 38 areas of the UK.
Ultra low load and low-regulation areas in the country will be established to boost housing construction and create new jobs.
You can see the… full list of areas here.
The limit on banker bonuses was also thrown in the trash.
Currently, fat cats can only earn less than 200% of their salary as a perk, but now the sky is the limit.
The government believes removing the cap will accelerate growth by attracting businesses to London rather than rivals New York, Frankfurt and Paris.