Growth Plan 2022 | 23 September 2022

Growth Plan 2022 | 23 September 2022

The Chancellor has delivered his Growth Plan 2022 setting out a series of measures to support economic growth across the UK. Announcements affecting businesses include:

Tax and duty

  • The Government is reducing Class 1 and Class 4 National Insurance contributions (NICs) by 1.25% from November 2022 and cancelling the introduction of the Health and Social Care Levy as a separate tax from April 2023.
  • The previously announced planned increase in the UK Corporation Tax rate from 19% to 25% that was due to take effect in April 2023 will not go ahead. Companies will continue to pay 19% on their taxable profits.
  • Alcohol duty will be frozen from February 2023. Draught relief will be extended to cover smaller kegs of 20 litres and above to help smaller breweries.
  • The 1.25% increase in dividend tax rates will be reversed from April 2023.
  • A digital, VAT-free shopping scheme will be introduced for international tourists to boost the high street.
  • The basic rate of income tax will be cut to 19p in April 2023, one year earlier than planned.

Investment

  • Investment Zones will be set up across the UK to encourage development and investment. The zones will benefit from lower taxes for business, relaxed planning rules and support for local growth.
  • The Seed Enterprise Investment Scheme (SEIS) will be expanded. From April 2023, companies will be able to raise up to £250,000 of SEIS investment.

Other measures 

Energy Bill Relief Scheme (EBRS) for non-domestic users

Through a new Government Energy Bill Relief Scheme, the Government will provide a discount on wholesale gas and electricity prices for all non-domestic customers (including all UK businesses, the voluntary sector like charities and the public sector such as schools and hospitals).

It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.

As with the Energy Price Guarantee for households, customers do not need to take action or apply to the scheme to access the support. Support (in the form of a p/kWh discount) will automatically be applied to bills. The level of price reduction for each business will vary depending on their contract type and circumstances.

The Government  will publish a review into the operation of the scheme in three months to inform decisions on future support after March 2023. The review will focus in particular on identifying the most vulnerable non-domestic customers and how the Government will continue assisting them with energy costs.

Off-payroll working reforms

The 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) will be repealed from 6 April 2023. From this date, workers across the UK providing their services via an intermediary, such as a personal service company, will once again be responsible for determining their employment status and paying the appropriate amount of tax and NICs.

Read the Growth Plan 2022

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