Baachu/GROWTH PLAN 2022 – WELFARE AND SKILLS

Baskar Sundaram
Baskar Sundaram

As part of today’s Fiscal Statement, the Chancellor has made the following announcements which will be of particular interest to these committees.

Employability and Universal Credit

  • The Administrative Earnings Threshold will be increased to 15 hours a week at National Living Wage from an individual claimant from January 2023. This builds on the increase due to come into effect from 26 September 2022 raising the threshold from 9 hours a week to 12 hours a week for an individual.
  • The Government will strengthen the sanctions regime to set clear work expectations in return for receiving Universal Credit.
  • Additional work coach support will be provided to new, eligible over-50s claimants and to over-50s that are long-term unemployed.

IR35

  • The 2017 and 2021 reforms to the off-payroll working rules (IR35) will be repealed from 6 April 2023. This means workers across the UK providing their services via an intermediary will once again be responsible for determining their employment status and paying the appropriate amount of tax and NICs.

Taxation

  • The Government will bring forward the 1 percentage point cut to the basic rate of income tax to April 2023. The additional rate of income tax will also be removed from April 2023.
  • Class 1 and Class 4 National Insurance Contributions (NICs) will be reduced by 1.25 percentage points from November. In addition, the introduction of the Health and Social Care Levy as a separate tax from April 2023 will also be cancelled.
  • The Government is reversing the 1.25 percentage point increase in dividend tax rates applying UK-Wide from 6 April 2023.

Summary:  Chancellor announces new Growth Plan with biggest package of tax cuts in generations – GOV.UK (www.gov.uk)

Full documents along with Annexes:  The Growth Plan 2022: documents – GOV.UK (www.gov.uk)

BSA Summary: https://www.bsa-org.com/wp-content/uploads/2022/09/The-Growth-Plan-2022-BSA-Summary.pdf

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