{"id":6374,"date":"2022-11-18T10:23:52","date_gmt":"2022-11-18T10:23:52","guid":{"rendered":"https:\/\/ifg.local\/articles\/budget-2022-key-things-taxpayers-and-businesses-need-to-know\/"},"modified":"2023-08-25T11:40:12","modified_gmt":"2023-08-25T11:40:12","slug":"budget-2022-key-things-taxpayers-and-businesses-need-to-know","status":"publish","type":"post","link":"https:\/\/www.islamicfinanceguru.com\/articles\/budget-2022-key-things-taxpayers-and-businesses-need-to-know","title":{"rendered":"Budget 2022: key things taxpayers and businesses need to know"},"content":{"rendered":"<p>Yesterday saw the debut Budget of new Chancellor Jeremy Hunt. In brief, the Government has, in its own words, &#8220;reversed nearly all the measures in the Growth Plan 2022&#8221; (i.e. the Mini-Budget).<\/p>\n<p><!--more--><\/p>\n<p>We&#8217;ve broken down the budget according to everyday taxpayers (which is most of us) and businesses (which is also a large number!).&nbsp;<\/p>\n<h2>Personal tax<\/h2>\n<ul>\n<li>Those on higher incomes will pay more tax. Previously you only started paying 45% tax at \u00a3150,000. That has come down to \u00a3125,140. So anyone earning \u00a3125,140 or more can definitely expect to pay more tax. This includes those on \u00a3150,000 or more because you now have an extra \u00a324,860 taxed at 45% which was previously taxed at 40%.<\/li>\n<li>There is no change to the tax-free allowance of \u00a312,570.<\/li>\n<li>Capital gains tax threshold has more than halved. You will now only get \u00a36,000 that you can make capital gain on without attracting Capital Gains Tax. Previously this was \u00a312,300. This comes into play from April 2023.<\/li>\n<li>From April 2024, this will then go down from \u00a36,000 to \u00a33,000.<\/li>\n<li>The government will uprate the Married Couple\u2019s Allowance and Blind Person\u2019s Allowance by the September CPI figure of 10.1% for the 2023-24 tax year. The Married Couple\u2019s Allowance will be valued at between \u00a34,010 and \u00a310,375 and the Blind Person\u2019s Allowance will be valued at \u00a32,870.<\/li>\n<li>Council tax is likely to rise as the Government has afforded more flexibility through this Budget to local councils with respect to Council Tax.<\/li>\n<\/ul>\n<h2>Businesses<\/h2>\n<ul>\n<li>Dividend allowance has halved from \u00a32,000 to \u00a31,000 from April 2023. This will affect the tax planning for many of you business owners who take dividends from your business.<\/li>\n<li>The bad news is that from April 2024, this will halve again to \u00a3500.<\/li>\n<li>The VAT threshold will remain at \u00a385,000. The Government has purposefully decided not to raise this threshold in line with inflation, essentially meaning more businesses are likely to fall under the VAT registration requirement. That&#8217;s because most businesses are having to increase their prices but if the VAT threshold is static, you will hit it quicker.<\/li>\n<li>To address tax avoidance, the government will legislate in Spring Finance Bill 2023 so that shares and securities in a non-UK company acquired in exchange for securities in a UK close company will be deemed to be located in the UK. This will have effect where an individual has a material interest in both the UK and the non-UK company and where the share exchange is carried out on or after 17 November 2022. Draft legislation and supporting documents will be published alongside the Autumn Statement.<\/li>\n<li>The Government has decided NOT to go ahead with an Online Sales Tax for now.<\/li>\n<li>National Living Wage will increase from 1 April 2023 to \u00a310.42 an hour.&nbsp;\n<\/li>\n<\/ul>\n<h2>IFG Commentary<\/h2>\n<p>This is the most anti-Conservative budget we have seen in some time. The cut to dividends and capital gains tax thresholds are particularly bad news for small business owners who pay themselves from their business as well as investors who make their living investing in the stock market.<\/p>\n<p>It is clear that the aim of the Budget is to get more money into Government coffers. Through measures such as increasing the minimum wage whilst freezing tax thresholds, many more people will enter tax-paying territory for the first time.&nbsp;<\/p>\n<p>Highly-paid professionals will be paying more in tax. Someone earning \u00a3150,000 will be \u00a31,243 worse off. And the more that wages increase in line with inflation and pressure on employers whilst the tax thresholds remain static, the more tax at higher levels people are likely to be paying.&nbsp;<\/p>\n<p>The big wins from the Budget go to two groups of people: (1) the lowest earning &#8211; as the minimum wage has increased nearly 10% to \u00a310.42, and (2) pensioners, with the Government keeping their promise of increasing the pension in line with inflation.<\/p>\n<p>The losers from this are likely to be small business owners and high earners.<\/p>\n<p>What are your thoughts?<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Yesterday saw the debut Budget of new Chancellor Jeremy Hunt. In brief, the Government has, in its own words, &#8220;reversed nearly all the measures in the Growth Plan 2022&#8221; (i.e. the Mini-Budget).<\/p>\n","protected":false},"author":25,"featured_media":6375,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","wds_primary_category":0},"categories":[1],"tags":[33],"acf":[],"_links":{"self":[{"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/posts\/6374"}],"collection":[{"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/comments?post=6374"}],"version-history":[{"count":0,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/posts\/6374\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/media\/6375"}],"wp:attachment":[{"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/media?parent=6374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/categories?post=6374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/tags?post=6374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}