Page 6 - Growth Plan Newsletter

* 0% on the first £300,000 for first time on property worth up to £500,000
+ 0% on the first £425,000 for first time on property worth up to £625,000

Wales and Scotland have their own land taxes, so are unaffected unless they decide to make changes in response.

Corporation tax

The Spring Budget 2021 introduced a large increase in the corporation tax rate from April 2023:

• The current main flat rate of 19% was to be replaced with a new rate of 25% for businesses with profits
above £250,000.

• For businesses with profits between £50,000 and £250,000 a marginal relief would apply that effectively
meant the existing 19% rate applied to the first £50,000 of profits with a 26.5% rate on the excess.

• For businesses with profits of up to £50,000, the existing 19% rate would remain.

The increase tax on companies was due to generate about £17bn a year by 2025/26. Mr Kwarteng has chosen to forgo
that revenue and maintain a 19% corporation tax rate. There will also be no special “windfall tax” on energy (or any
other) companies.

PLANNING POINT

The changes to corporation tax rates, NICs, income tax rates and dividend tax rates have once again
altered the calculations on the relative financial benefits of incorporation over self-employment.
Whether or not you have reviewed this recently, it could be worth revisiting the topic with your wealth
manager.

Capital Allowances

The Annual Investment Allowance, which has long oscillated at the whim of Chancellors will now be fixed at its current
£1 million level. It had been due to fall to £200,000 from next April.

Company Share Option Plan

From April 2023, qualifying companies will be able to issue their employees with a maximum of £60,000 of Company
Share Option Plan (CSOP) options, double the present ceiling. The restrictions on share classes within CSOP will be
eased, widening access to CSOP for growth companies.

Seed Enterprise Investment Scheme

Young companies will be able to raise up to £250,000 of Seed Enterprise Investment Scheme (SEIS) investment from
2023/24, compared with a current limit of £150,000. In addition, from the same date:

• The gross asset limit will be increased to £350,000.
• The company age limit will be increased from 2 to 3 years.
• The annual investor limit will double to £200,000.

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