On 23 September 2022, Chancellor Kwasi Kwarteng delivered what the Treasury called a "Growth Plan" and what the financial markets, the BBC, and ultimately every taxpayer came to know simply as the Mini-Budget. It was the largest unfunded tax-cutting package in fifty years, it triggered an immediate gilt market crisis, it forced the Bank of England into emergency intervention, and within six weeks almost every single measure had been reversed.
For accountants and their clients, the Mini-Budget remains the textbook example of why tax planning should never run ahead of legislation. Decisions taken on the morning of 24 September on the basis of headline announcements looked very different by mid-October.
What was announced on 23 September
The package was extensive. The basic rate of income tax was to fall from 20% to 19% from April 2023 — accelerated by a full year from the Spring Statement timetable. The additional rate of 45% was to be abolished entirely, leaving a top marginal rate of 40%. The planned April 2023 corporation tax rise to 25% was to be cancelled, keeping the headline rate at 19%. The 1.25 percentage point increase in employer and employee National Insurance contributions, in force only since April 2022, was to be reversed from 6 November 2022. The Health and Social Care Levy that was due to replace it from April 2023 was to be scrapped. Stamp Duty Land Tax thresholds were to be raised. IR35 reforms in the public and private sectors were to be repealed. The cap on bankers' bonuses was to be removed.
What survived
By the time Jeremy Hunt delivered his emergency statement on 17 October 2022 and the Autumn Statement on 17 November 2022, the only major measures still standing were the reversal of the 1.25 percentage point National Insurance increase, the abolition of the Health and Social Care Levy, and the increase in the Stamp Duty Land Tax nil-rate band to £250,000 for residential property (which was subsequently scheduled to taper). Everything else was reversed.
The corporation tax rate rose to 25% on schedule from April 2023. The additional rate of 45% was retained and its threshold was lowered from £150,000 to £125,140 from April 2023. The basic rate stayed at 20%. The IR35 repeal never happened.
The gilt market crisis in plain English
The gilt market reaction is worth understanding because it shaped the Bank of England's posture for the following year and indirectly raised borrowing costs for every UK business. Markets concluded that £45 billion of unfunded tax cuts, layered on top of a £150 billion energy support package, would require sustained gilt issuance at a pace investors were not willing to absorb. Yields spiked, sterling weakened, and pension funds running liability-driven investment strategies were forced into a fire sale of gilts to meet margin calls. The Bank of England intervened with emergency gilt purchases on 28 September.
What we told clients in the days that followed
Our tax planning team's advice in late September was the same as in late March: do not act on announcements that have not yet been legislated. Several owner-managed businesses had been planning to bring forward dividend distributions on the assumption that the additional rate would be abolished from April 2023. We held them off — and it turned out to be the correct call, since the abolition was withdrawn on 3 October, just ten days after the original announcement.
For high-earning directors with income near the £150,000 mark, the subsequent decision in the Autumn Statement to lower the additional rate threshold to £125,140 from April 2023 actually pushed them in the opposite direction of the original Mini-Budget intent, increasing rather than reducing their marginal exposure.
The wider lessons
The Mini-Budget reinforced several principles that we apply across every client engagement. First, time announcements against legislation — Finance Bills become law months after Budget day, and a great deal can change in between. Second, model the policy you have, not the policy you hope will arrive. Third, when fiscal events produce extreme market reactions, expect the policy to be rewritten rather than the markets to settle.
For SMEs reviewing the past four tax years, the Mini-Budget is best understood as a 23-day fiscal episode that produced no lasting structural change but accelerated the political case for the threshold freezes that followed in November. The freezes are what continue to shape personal tax bills to this day.
If you would like a structured review of what has and has not changed since 2022, book a planning call with our team and we will produce a multi-year position summary tailored to your circumstances.