The Chancellor made a statement to Parliament containing a number of tax measures some of which were almost immediately effective with others planned for future dates. Subsequently he abandoned some of the future plans. Many of the proposals would, in any event, have had no immediate impact on the position in Scotland.
Income tax
The basic rate of income tax in will be reduced to 19% from April 2023. This will not affect Scotland where the starting rate is already 19% although the Scottish rates will be set later in the year and may also be altered. The proposal to abolish the 45% highest rate of tax has been abandoned for the moment. Again, this would not, of itself, have had any effect in Scotland.
Corporation tax
The proposal made by the previous Chancellor to increase the main rate of corporation tax to 25% has been abandoned. CT rates are set UK wide.
National Insurance
The increase of 1.25% in the NI rates for employees and employers which came into effect in April will be eliminated from 6 November 2022. The position regarding the rates to apply at various dates in the year along with the relevant thresholds are complicated. An average rate will be applied for directors who are subject to an annual basis of charge to NI and a similar proportionate rate applied for Class 4 NI.
Annual Investment Allowance
The AIA will, contrary to previous announcements, remain at £1m from April 2023 to April 2024.
SDLT
The threshold for SDLT has been doubled. This only applies to transactions in England and Wales. No changes have yet been announced for Scotland.
Dividends
The rate of tax on dividends was increased by 1.25% in April 2022. This will be removed from April 2023. It may be beneficial, where possible, to delay payment of dividends to avoid the additional rate.
