How does the mini-budget affect Wales and Scotland? What are the devolved nation’s responses to it?
There is enormous amount of information available on how the mini-budget affects those living in England but not so much for the other devolved jurisdictions of the United Kingdom (Wales and Scotland) – and yes, there are subtle differences.
In this article we at Locumkit dissect the mini budget for locums and healthcare practitioners based in Wales and Scotland.
What was announced:
Income Taxes
The chancellor will bring forward a cut in the basic rate of income tax from 20% to 19% to April 2023.
Corporation Tax
Corporation tax: the proposed rise to 25% has been cancelled, keeping it at 19%.
Stamp Duty Land Tax (SDLT)
SDLT only applies to land transactions in England and Northern Ireland. The SDLT nil rate band has been doubled from ￡125,000 to ￡250,000. The nil rate band for first-time buyers has been extended from ￡300,000 to ￡425,000 and the value on which first-time buyers' relief can be claimed has also risen from ￡500,000 to ￡625,000.
Investment Zones
The UK Government announced the introduction of Investment Zones across England that will benefit from low taxes and liberalised planning rules in a bid to encourage investment.
Off-payroll working rules (IR35 reforms)
It has been announced that the 2017 and 2019 reforms will be reversed from 6 April 2023 on the basis that they were unduly burdensome for business.
Although this reversal of the anti-avoidance provisions will be welcomed by many employers, the off payroll working rules will remain in place. The obligation to assess liability for employment taxes and to account for those taxes to HMRC will revert to the PSCs.
Impact of Mini-Budget for performer living in Wales
Income Taxes
The finance minister for the Welsh Government has confirmed that the changes to Income taxes will also apply to Welsh residents.
National Insurance
National Insurance Contributions are not a devolved matter therefore Welsh taxpayers will also benefit from the NIC reductions.
Corporation Tax
The reduction in Corporation Tax from April 2023 will apply to Welsh companies.
Capital Allowances
The capital allowances annual investment allowance (AIA) for qualifying plant and machinery is to be permanently set at ￡1 million. This applies equally in Scotland.
Land Transaction Tax (LTT)
On 27 September 2022, the Welsh Government announced that the main residential rate and bandings for LTT are to change from 10 October 2022.
The updated rates from 10 October are as follows:
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Investment Zones
The UK Government is currently liaising with the devolved nations to set up similar investment schemes across Scotland, Wales and Northern Ireland.
Off-payroll working rules (IR35 reforms)
This change applies equally in Scotland.
Impact of Mini-Budget for performer living in Scotland
The Scottish Government has announced that they are considering the implications of the mini-budget and will report back in the week commencing 24 October.
Income Tax
·????????The reduction in the basic rate of Income Tax announced in the mini budget will not currently affect Scottish taxpayers in receipt of non-savings and non-dividend income.
·????????Scotland retains the Additional Rate of tax for non-savings and non-dividend income.
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National Insurance
National Insurance Contributions are not a devolved matter therefore Scottish taxpayers will also benefit from the NIC reductions.
Corporation Tax
The reduction in Corporation Tax from April 2023 will apply to Scottish companies.
Capital Allowances
The capital allowances annual investment allowance (AIA) for qualifying plant and machinery is to be permanently set at ￡1 million. This applies equally in Scotland.
Stamp duty Land Tax
The Scottish Government has not yet made any announcement regarding whether it is likely to make similar amendments to Land and Buildings Transaction Tax.
Investment Zones
The UK Government is currently liaising with the devolved nations to set up similar investment schemes across Scotland, Wales and Northern Ireland.
Off-payroll working rules (IR35 reforms)
This change applies equally in Scotland.
About the author
Mo Chaudhry is a dual qualified Optometrist and Chartered Accountant and heads the Accountancy department at Locumkit. With his unique background he assists locums to practice owners in the Optical industry with their accounting affairs and helping their businesses.
We have clients all over the UK including Wales and Scotland from locums to independent practices. If you have any questions on any of the topics covered in this alert, please contact Mo Chaudhry on [email protected].