News

Chancellor’s “mini budget” – what does it mean for businesses?

25 Sept 2022

On Friday, Chancellor Kwasi Kwarteng made his first fiscal statement since taking office. In his so-called “mini budget”, Kwarteng announced £50bn in tax cuts and outlined the ways in which the government plans to boost economic growth. So, in light of Friday’s announcement, what can businesses expect?

Phone

1. National Insurance contributions

The government has scrapped the rise in Employer National Insurance Contributions and dividends tax that were introduced to pay for a Health and Social Care Levy. The cut will come into effect from November 6. 

2. Corporation tax

Corporation tax is also changing – or rather, it is staying the same. 

The previous PM Boris Johnson planned to increase corporation tax from 19% to 25% in April 2022; this has been scrapped, Chancellor Kwasi Kwarteng announced. 

3. Annual Investment Allowance

The Annual Investment Allowance, which allows companies to deduct the full cost of a qualifying item when calculating taxable profits, is to be set at £1m from April 1 2023. 

This means businesses can benefit from 100% tax relief on their plant and machinery investments to the value of £1m. 

4. Investment Zones

The government has also announced the creation of special investment zones which will encourage productivity and boost jobs in specific locations. 

The government is in discussion with 38 local and mayoral combined authority areas in England. The initiative will also be rolled out in Scotland, Wales and Northern Ireland.

The zones will provide businesses with targeted and temporary tax cuts.

5. IR35

Chancellor Kwasi Kwarteng announced that the IR25 reform that recognises contractors as employees for tax purposes will no longer apply from April 2023. 

Like before, contractors will be responsible for their own tax. 

6. Investment schemes

The Enterprise Investment Scheme, Venture Capital Trusts and the Seed Enterprise Investment Scheme are to be extended beyond the 2025 Sunset Clause.

The Seed Enterprise Investment Scheme (SEIS) will now allow businesses to now raise £250,000 – an increase of 66%.

7. Company Share Option Plan

Previously, the company share option plan (CSOP) enabled businesses to offer employees share options of up to £30,000. This is being raised to £60,000.

Fuel duty, reduced VAT rates for businesses and the issue of business rates were among the points not discussed in Friday’s “mini budget”. 

A full Autumn Budget is expected later this year, the date of which is yet to be announced. 

Funding for businesses

While the Chancellor’s announcement may bring some relief to SMEs, we understand that many businesses might still require funding. 

Funding Options helps UK firms access business finance, working directly with businesses and their trusted advisors. 

Funding Options can introduce applicants to several providers based on the applicants' circumstances and creditworthiness, with all quotes subject to status and income.

Our award-winning platform, Funding Cloud(™), accurately and quickly matches businesses with the right lender and finance option for their needs. 

From unsecured business loans to revolving credit facilities and merchant cash advances, we work with over 120 lenders offering dozens of lending products. 

Apply for funding in minutes – our record from application to credit approval is just 20 seconds, and cash in the bank within as little as 18 minutes. 

Apply today to get the funding you need to trade, plan, and grow with confidence.

Get started

Funding Options

Funding Options

Editorial team

Business Funding

Check your eligibility using our online form without affecting your credit score.

Apply here
)))

Subscribe to our newsletter today

Sign up for the best of Funding Options sent straight to your inbox.