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What does the mini budget mean for workers?

Fiona Kyle
September 29, 2022

The mini budget announced by new PM Liz Truss and Chancellor Kwasi Kwarteng has hit the headlines for all the wrong reasons as it sent the value of the pound into a downward spiral.

But what did the announcement mean for workers in the UK?

Income tax

From April 2023 the basic rate of income tax (which is paid by those earning between £12,571 and £50,270) will fall from 20% to 19% which is a year earlier than originally announced. On average this means you'll be an average of £170 a year better off if you pay the basic rate, rising to £360 for those who pay the higher rate.

The 45% tax band which is currently paid by people earning more than £150,000 will be scrapped altogether from April 2023. The highest rate will be 40% which will be paid by anyone earning more than £50,270.

National Insurance

In April 2022, a 1.25% rise in national insurance contributions was introduced. This will be scrapped from 6 November 2022 and save the average worked £330 a year.

The Health and Social Care Levy, which was due to introduced in April 2023, has also been scrapped.

IR35 rules

The IR35 tax legislation is going to be abolished from April 2023 so self-employed people will return to being responsible for getting their employment status right, and paying the right amount of tax and national insurance.

Bankers bonuses

The cap that meant a banker couldn't earn more than twice their salary through bonuses has been scrapped.

Stamp duty

If you're planning to buy a house, you will pay no stamp duty on the £250,000 value of the house (up from £125,000) which rises to £425,000 for first time buyers (up from £300,000).