Kwarteng confirmed many changes that were hinted at during the week, such as stamp duty reform and removing the bankers’ bonus cap, adding that the changes would help fuel the UK’s economic growth.
Below are some of the key mini Budget changes that were made and the full speech can be found here.
1. Stamp duty nil rate doubled
The government will double the threshold which people start to pay stamp duty from £125,000 to £250,000.
The level at which first-time buyers begin paying stamp duty will increase from £300,000 to £425,000. First-time buyer can also access relief, where they pay five per cent stamp duty, when buying a property worth less than £625,000, up from £500,000 previously.
The changes mean that moves can save up to £2,500 and first-time buyers can get up to £11,250 in relief.
The government added that it will allow up to 29,000 more people to move per year.
2. Planning system to be streamlined
The mini Budget also teased planning reforms, which would help develop infrastructure products and grow housing supply.
Kwarteng said that the reforms would be announced in the coming months, and a new bill would be brought forward.
This involves simplifying assessments, appraisals, consultations, duplications and regulations, as well as reviewing the government’s business case process.
Kwarteng added that it would increase the disposal of surplus government land to build new homes.
3. Creation of investment zones
The government will introduce “investment zones” with tax incentives, such as no stamp duty or business rates, to encourage growth.
The need for planning applications will also be “streamlined” in these areas, and Kwarteng said that he was in “early discussions” with certain areas around proposed plans.
There are 38 areas slated to be investment zones across England, going from Cornwall to Yorkshire.
Kwarteng added that it would work with Scotland, Wales and Northern Ireland so they could have their own iterations of the “investment zones”.
4. Bankers’ bonus cap to be removed
The mini Budget also confirmed that the bankers’ bonus cap would be withdrawn, which aims to boost the competitiveness of London as a financial hub.
The cap, introduced in 2014, set remuneration of select bank staff at 100 per cent of their fixed pay or 200 per cent with shareholder approval.
Kwarteng said that the bonus cap just pushed up basic salaries of bankers or drove activity outside Europe and did not cap total remuneration.
5. IR35 reforms repealed
The government also said it would row back on changes to off-payroll working rules, known as IR35, to streamline current rules.
The change comes into force in April next year and means that workers providing services via an intermediary will be responsible for determining their employment status and how much tax and national insurance contribution they must make.
Kwarteng said that reforms in 2017 and 2021 had added “unnecessary complications and costs for many businesses”, hence its removal.
6. Corporation tax rise scrapped
The planned increase to Corporation Tax, from 19 per cent to 25 per cent in April next year, has been cancelled.
It will now be 19 per cent for all companies, which is the lower than the rest of the G7 and lowest in the G20 according to the Treasury.
The cutting back on the proposed rise will make the UK more competitive and “incentive investment and enterprise”, the Treasury added.
7. Basic income rate tax cut and additional rate cancelled
The basic rate of income tax will be cut to 19 per cent and the additional rate for highest earners will be abolished next year.
There will be a 1p cut to the basic rate of income tax from April next year.
Kwarteng said that the changes would mean 31 million people sabed an average of £170 a year, costing the government around £5bn.
The additional rate of tax, 45 per cent on those earning £150,000 or more, will also be abolished which will “attract the best and brightest to the UK workforce, helping businesses innovate and grow”.