On the 23rd of September, the UK's Chancellor of the Exchequer Kwasi Kwarteng, presented the highly anticipated mini-budget. Amidst the ongoing cost of living crisis, households and businesses alike waited in anticipation for the Chancellor to reveal details of emergency fiscal policies that are to be introduced in the coming months. The main feature of this fiscal event was the £45bn worth of tax-cuts as the UK Chancellor strives to signal that “growth is our priority”. Key outcomes for businesses, as the government endeavours to prioritise economic growth, include:

• The renouncing of planned corporation tax and NIC increases. Corporation tax will remain at 19% rather than the proposed 25% - a reversal costing an estimated £17bn. A competitive business tax system supports investment, as the government aims to close the productivity gap between the UK and its European rivals

• Smaller businesses will also welcome policy changes to encourage further investment in the UK. The Chancellor made direct announcements focused on the Enterprise Investment Scheme and Venture Capital Trust; disclosing plans to abandon the sunset clause in favour of extending the schemes beyond 2025.

• In relation to the Seed Enterprise Investment Scheme (SEIS), firms can now raise up to £250,000. This new upper limit will allow for 66% more funding into early stage companies. The increase in generosity and availability of these schemes is in line with the government's aim to encourage investment and accelerate the growth of high potential businesses within the UK.

• The gross asset limit under the SEIS is also to be increased to £350,000 and the age limit of eligible companies is also to be raised, thus extending support to a greater number of UK businesses.

• The tax-advantaged company share option plan (CSOP) limit - that allows businesses to offer employees share options - is being raised from £30,000 to £60,000.

• The Annual Investment Allowance for businesses will be permanently set to its highest level to provide businesses with 100% tax relief on their plant and machinery investments up to £1m.

• Limits on bankers’ bonuses have been abolished, as such regulation was said to undermine growth.

• The mini-budget also saw the introduction of the Long-Term Investment for Technology & Science (LIFTS) competition - a scheme that will provide up to £500m in funding designed to expedite investment from pension schemes and other investors into UK’s tech and science businesses. This aims to unlock billions of pounds of further investment into UK scale-ups over time.

The proposed tax and spending plans see the biggest tax cuts since the 1970s, as the government pledged to target 2.5% economic growth per year, in alignment with the Bank of England’s 2% inflation target.

Individuals will also benefit from a revision of tax rates; notably the basic rate of income tax has been cut from 20% to 19% starting in April 2023; a year earlier than previously promised.  Kwarteng confirmed that the top rate of income tax - the 45% rate for earnings over £150,000 – is to be abolished. In its place will remain the single higher rate of income tax at 40%. Stamp duty land tax has also been cut, with the limit raised to £250,000 or £425,000 for first time buyers.

Evidently, high growth policies dominated the broadcasts of today’s fiscal event. The particular focus given to investment is encouraging for EIS/ SEIS businesses. The vital role of entrepreneurship and innovation to the UK economy is being recognised and accommodated. We look forward to the Autumn Budget and Spending Review with confidence that UK businesses are being supported to enable their growth.