TOGETHER WITH

In today's email, we've got:

• what the mini budget actually is (and does)

• the CIA delving into the world of podcasts

• a callout for your tips and tricks for freshers starting uni

EDITOR'S RAMBLE 🗣

Good morning!

This is the second week of the new LittleLaw newsletter but it's also the second week living in my new home. I no longer wake up wondering where on earth I am, surrounded by boxes, so thats a nice change.

It's my first house, so I'm learning a lot about general life admin when you move. Lots of bills to arrange, boxes to unpack and, perhaps most importantly,  socialising with the neighbours so they accept me into the fold.

Although actually getting a place is unbelievably stressful, and takes a hell of a lot of scrimping and saving, its certainly worth it in the end! And with the latest news on stamp duty limit increases, it will hopefully make buying easier for other first-time buyers too (but more on that in a minute)!

I won't be the only person waking up in pastures new this week though. There'll also be lots of you waking up in new surroundings this week as uni officially starts back for the new academic term.

So, in preparation for when all the freshers weeks end (because that's priority number one right now) we're asking for YOUR tips and tricks for making the most of uni life. We'll get together a list of all of your responses and include it in one of our next newsletters. All you'll need to do is reply to this email with your sagely advice. 

Now enough from me, on with the good stuff!

- Connor

FEATURED REPORT 📰

💰 Your mini-budget cheat sheet

Credit: Giphy

What's going on here?

The government released a "mini-budget" last week in an attempt to deal with the cost of living crisis (the normal" budget is usually issued in the spring).

What does this mean?

Kwasi Kwarteng (the government's chief financial minister) set out what changes were being made by the government to help tackle higher costs of living. It included a number of changes to things like income tax, stamp duty and energy prices. It's going to have a huge impact on peoples' and companies finances.

The impact on companies

What's happening to corporation tax?

In the UK, corporations get taxed at a rate of 19% on their profits. In 2021, the plan had been announced to raise corporation tax so it could be up to 25%, which was meant to come into effect in April next year.

But now, that's not happening. The mini budget reversed this so corporation tax will remain at 19%. This means that businesses benefit from less tax liability so they'll have more cash to work with.

What are the new 'investment zones'?

Part of the mini budget was the announcement of new investment zones across the UK. These are areas like Greater Manchester, West Midlands, Thames Estuary, among others. 

The government hasn't released all the details on this scheme yet. But it's clear the 'zones' will have lower taxes for businesses and lower personal taxes for employees living there. 

So, you'll probably be seeing businesses (including law firms) taking advantage of these benefits and relocating or opening offices!

What's SEIS and how has it changed?

The government made changes to the Seed Enterprise Investment Scheme (or SEIS for short). This is a scheme that gives those who invest in start-ups and companies in their early stages income tax relief.

Early-stage companies will benefit as they can now claim £250,000 in SEIS investments (it used to be £150,000). Before the change, companies could offer investors a really tax efficient place to put their money - but only up to £150,000 total (which doesn't go too far when you're trying to make the next TikTok). But now, you can raise £250,000 under the scheme!

Tech investors (read: very wealthy investors) or venture capital funds will also welcome this change as their tax free personal allowance has doubled from £100,000 to £200,000.

All in all, you could say there were some SEISmic changes... Ok, I'll leave now.

The impact on individuals

What's happened to National Insurance? 

National Insurance is a payment made by employees and employers so this is also a change for businesses. These payments help people who are sick, unemployed, or retired. In April this year, the National Insurance rate increased:

• Employer’s NI increased from 13.8% to 15.05%

• Employee’s NI increased from 12% to 13.25%

Now it's been announced that National Insurance will be dropping to the original rates. The previous rise of 1.25%, will officially be reversed from the 6th November onwards. This will mean a saving for employers and employees. The government said it expects the change will translate to a £330 annual saving for the average person. 

What was the deal with income tax before the mini-budget?

Before going into the changes, a quick recap on income tax: There are two levels of income tax (well technically 3).

• The basic rate (20% before the mini budget), and 

• The higher rate (40% before the mini budget)

You will pay the basic rate if you earn below £50,270 and the higher rate if you earn over this. The third rate is what is called the "additional rate". This applies if you earn over £150,000 a year and means you pay a slightly higher rate (45% before the mini-budget).

What's changing and do the changes help everyone or just the rich? 

Some changes will certainly help everyone. The basic rate of income tax is being brought down to 19% starting from April of next year, the lowest it has ever been. This means that income tax will be cut by 1 pence in the pound. Clearly then, everyone will benefit from this cut.

However, the change does mean that those on higher incomes will save more. Those on the basic rate will save roughly £130 a year, whereas those on the higher rate will save £360. On top of this, the additional rate (that 45% on salaries over £150,000) is being completely abolished in April of next year. So it's pretty clear that, although everyone gains from these changes, those with higher incomes are certainly the big winners.

Because of this change, the UK also becomes a more attractive destination for big businesses to move to as the lower tax rates makes it attractive to staff (especially those earning the big money). 

What happened to stamp duty and why is that good? 

Stamp duty is the tax that you pay in the UK when you buy a house. This tax only applies to the value of a house over a certain amount. So, before the mini-budget, you wouldn't pay any tax on the first £125,000 worth of your house (provided you weren't a first time buyer) but you would have to pay stamp duty on anything over that. So if you bought a house worth £130,000, you would pay tax on the £5,000 over the £125,000.

As of the mini-budget, the value that you don't pay stamp duty has risen to £250,000! On top of this, the allowance for first time buyers (who are allowed a higher value on which they don't pay stamp duty to help them get onto the property ladder) rises to £425,000. This is a huge increase to the £300,000 allowance that existed before the mini-budget. 

This means that buying a house will be a more achievable goal for many more people. The government says that over 200,000 people will now be exempt from paying stamp duty. Even if it doesn't save everyone from paying stamp duty, it will save people thousands! And trust me, every little helps when you move!

Has the mini-budget solved the cost of living crisis?

As you'll already know (and so will your wallet) energy prices are at an all time high. Many were expecting some wide sweeping changes as part of the mini-budget to help combat this but... nothing has really changed. Although it generally supported the "Energy Price Guarantee" (which was announced on the 8th September and seeks to limit the average UK household's energy bills to £2,500), there were no other measures implemented. 

Credit: BBC News

So, was the mini-budget a success?

Although there are some big headliners in the mini-budget (we're looking at you stamp duty), the general consensus is that any savings made will largely be dwarfed by the soaring costs of energy and higher interest payments on mortgages impact both individuals and businesses.

The changes have also brought the divide between those on the basic income rate and the higher income rate into the spotlight. Many are questioning how effective (and fair) the current government is, and this may have a huge impact on the next general election as well as on the size of our wallets.

Now, armed with the info above, you should be able to hold your own over the dinner table when someone brings up the mini-budget! 

OUR COMMUNITY 👥

Tips and tricks for thriving at university 🏫

We're looking to put together some key pieces of advice for making the most out of life at university. It's a great time of your life but no one actually tells you how to "do uni". 

With that in mind, we wanted to impart some wisdom and make sure that people don't make the same mistakes we did (and there were many, I can assure you...).

What advice you would give to yourself when you were first starting university?

It can be about living with new people, how to make the most out of lectures, budgeting mistakes you made or even cooking tips!

My go-to uni meal was always pasta bake. 😍 🍝   

All you have to do is reply to this email with your insights and we'll share our favourites in a future newsletter! 📧 

TOGETHER WITH FLOWHUDDLE 🤝

A community supporting you to enter a career in law

Application period is up and running, now (sorry for reminding you). If you've ever done it before, you'll know that applying for law firms in hard - especially when you're balancing it with uni, work and social stuff.

But it's a little bit easier with friends.

FlowHuddle is a supportive online community of aspiring lawyers.

They've got:

• 💻 remote co-working sessions,

• 🧠 expert office hours,

• ☕️ in-person meet-ups, and more

...to give you the best chance in your applications.

Also - you can make some friends along the way.

 A BIT OF FUN 😄

Riddle me this

In the few hours I've been able to carve out with the recent house move (and after finally getting wifi back) I've been watching the latest Lord of the Rings series, Rings of Power. So far I'm loving it and its made me laps back into terrible impressions of Gollum (much to my girlfriend's dismay).

So when thinking about which quiz I could do this week, there was only once choice; riddles! 

Can you answer the below riddles? 

1. Who am I? Some try to hide, some try to cheat, but time will show, and we always will meet. Try as you might to guess my name, I promise you'll know when you I do claim.

2. What am I? From the beginning of eternity to the end of of time and space. From the beginning of every end and the end of every place.

3. What is it? It runs and runs but can never flee. It is often watched, yet never sees. When long it brings boredom, when short it brings fear.

Credit: Giphy

Scroll down to the bottom to see if you were right. 👀

IN OTHER NEWS 🗞

• 📉 The pound continues to drop in value: The value of the pound has fallen to a new low, the lowest it has been in 37 years. This drop came as a result of the release of the mini-budget and the sweeping tax cuts it entailed. A weak pound is bad for any businesses which import goods from abroad as their money won't go as far. 

• 📅 MPs table a bill to bring in a four-day working week: The measure is currently being trialled by more than 3,000 workers across 70 companies. The workers retain their full pay while working 80% of their previous hours (what a deal!) Some law firms have even tried this and saw it made people more efficient.

• 🚨 Volodymyr Zelenskyy calls for Russian troops to surrender: Following Russia's detention of thousands of Russians as a result of their protests, the Ukrainian president has urged Russian troops to surrender as he says that the Russian government "does not care about the lives of Russians". The war continues to have an awful humanitarian impact. It has also caused supply chain issues for businesses across the world, also contributing to the increase in energy prices in the UK.

AROUND THE WEB 🌐

• 📝 Applications: Shearman & Sterling's Paul Gascoyne goes over ways that you can improve your law firm applications.

• 😍 Interesting: The CIA have started their own podcast series called "The Langley Files". Does anyone else see a Netflix adaption incoming?

• 🗞 Useless: Ye (or Kayne West as he used to be know) admits that he has never read a book in his life. He compared reading to eating Brussels sprouts.

Credit: lawyer2be; variety; r/nottheonion

Quiz Answer: 

1. Death (sorry it's a bit morbid)

2. The letter E

3. Time