On the 23rd September, the ‘mini budget’ was announced setting out what has been called the Growth Plan.
However, the subsequent impact on markets has led to a series of U-turns on these announcements. The most significant coming on the 17th October.
So, we thought we’d look at the key announcements and changes which will impact businesses like yours.
What changes were announced in the original mini budget?
Amongst others, the original mini budget on the 23rd September included changes likely to impact businesses such as
- The cancellation of the planned rise to corporation tax. Instead of moving to 25% in April 2023 it would remain at 19%
- Reversing the 1.25% increase in National Insurance which was introduced in April 2022. Set to come into force from the 6th November, reducing the tax employees & employers pay
- Keeping the Annual Investment Allowance at £1million. Instead of the planned return to £200,000 in March 2023.
- Setting up investment zones around England to encourage development & business investment
- Reversal of changes made to IR35 (off payroll working) regulation
You can find full details of the changes announced in the Growth Plan on the gov.uk website
Whilst not announced in the mini budget itself, there was also the announcement about support businesses would receive with energy bills made earlier in September.
How has the mini budget changed?
We’ve since seen a series of U-turns on these announcements, coming at various points in the weeks following the mini budget.
Changes to the mini budget which will most likely impact businesses include:
- Corporation tax. This will now rise to 25% from April 2023. It will not remain at the current lower level of 19%
- The reforms which had been made to IR35 (off payroll working) regulation will no longer be reversed
Those which will go ahead include
- The reversal of the National Insurance increase
- Permanently setting the Annual Investment Allowance at £1million
You can find full details here of the announcements made about the mini budget on the 17th October.
What do these changes mean for small businesses?
Aimed at boosting growth and investment, the changes originally announced could have been positive for many businesses. Potentially providing the opportunity for businessowners to invest in and further grow their businesses whilst keeping more of the profits.
However, the subsequent rowing back on many of these changes is likely to be cause for concern for many businesses given the creation of further uncertainty.
We already find ourselves in challenging circumstances. High inflation, rising interest rates, high energy costs and the falling value of the pound impacting exchange rates. But when we add in U-turns, political instability, and the sentiment of the financial markets there is even more complexity for businesses to deal with.
We are already hearing some of our customers voice concerns over the dampening of consumer and customer confidence, as well as rising costs. But over the coming weeks it is highly likely that we will see more announcements from the government. There have already been warnings of difficult decisions that will need to be made on taxes and spending.
At Anthony Jones, we understand that these are incredibly testing and difficult times for our insurance buyers. We remain, as ever, committed to supporting all our current and prospective customers with the best insurance advice.