Autumn Statement – November 2022
On the 17th of November 2022, Jeremy Hunt unveiled his Autumn Statement. Despite being his first budget as Chancellor, he did not refrain from bringing in new tax rises and spending cuts in order to reduce the £55 billion fiscal black hole. Hunt stated that the budget will help rebuild the economy and reduce debt, and confirmed the budget’s priorities are stability, growth, and public services.
So, what did today’s Autumn Statement bring for both individuals and businesses? Below we have summarised the key announcements:
Individuals
Cost of Living
State Benefits: From April 2023, pension credit, state pension income and universal credit will increase by 10.1% in line with inflation.
Energy Costs: The Energy Price Guarantee will be adjusted so that a typical household will pay £3,000 per year (up from the current £2,500 per year) from April 2023 to 31 March 2024.
National Living Wage: The National Living Wage will increase by at least 9.7% for all individuals over the age of 16.
Cost of Living Payments: The government promised to provide means-tested benefit households with an additional £900 Cost of Living payment in 2023-24. Pensioner households will receive an additional £300 Cost of Living payment, and individuals on disability benefits will receive an additional £150 Disability Cost of Living payment in 2023-24.
Individual Taxes
Additional Rate Threshold: From April 2023, the threshold for the highest earners in the UK who pay the highest rate of income tax (45%) will be reduced from £150,000 to £125,140. This will mean current additional rate taxpayers will pay a £1,200 more in tax per year.
Personal Tax, Inheritance Tax and NIC thresholds: The Chancellor confirmed the Personal Allowance, Inheritance Tax rate bands, and National Insurance thresholds that are already fixed at their current levels until April 2026, will now be maintained for an additional two years until April 2028.
Dividend Allowance: From April 2023, the tax free dividend allowance for individuals will be reduced from £2,000 to £1,000. From April 2024, the allowance will be reduced further to £500.
Annual Exemption for CGT: From April 2023, the annual exemption for individuals who sell assets subject to capital gains tax will be reduced from £12,300 to £6,000. From April 2024, the exemption will be reduced further to £3,000.
Married Couples Allowance and Blind Persons Allowance: The government will uprate the Married Couple’s Allowance and Blind Person’s Allowance by 10.1% for the 2023-24 tax year.
Stamp Duty Land Tax (SDLT): Increases to the SDLT nil rate threshold, First Time Buyer’s nil rate threshold and increase to the First Time Buyer’s maximum relief made in September 2022 will remain until 31 March 2025.
Businesses
Corporation Tax: The planned increase in the Corporation Tax rate to 25% for companies with over £250,000 in profits will go ahead.
Company Car Tax Rates: The government is setting rates for Company Car Tax until April 2028. This means percentages of electric and ultra-low emission cars will increase by 1 percentage point in 2025-26, a further 1% in 2026-27 and a further 1% in 2027-28. Rates for all other vehicle bands will be increased by 1 percentage point for 2025-26 and will then be fixed in 2026-27 and 2027-28.
Company Van Tax Rates: From 6 April 2023, Car and Van Fuel Benefit Charges and Van Benefit charge will increase in line with the Consumer Price Index set in December 2022.
VAT threshold: The VAT registration and deregistration thresholds will maintain at their current levels for a further period of 2 years from 1 April 2024.
Business Rates: The government will be providing £13.6 billion of support for businesses over the next 5 years. This will include freezing multiplier rates in 2023-24, a new Upwards Transitional Relief Scheme for business rates on business properties and increases in support for the smallest businesses losing eligibility or seeing reductions in Small Business Rate Relief.
Research and Development (R&D): For expenditure on or after 1 April 2023, the Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20%, the small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86%, and the SME credit rate will decrease from 14.5% to 10%.
Annual Investment Allowance: The government will set the Annual Investment Allowance (AIA) at its highest ever permanent level of £1 million from 1 April 2023.
Enveloped Dwellings: The annual chargeable amounts for the ATED will be uplifted by the September CPI figure of 10.1% for the 2023-24 ATED charging period.
As always, our team are here to answer any questions you may have. Please do contact us if you have any questions or call us on 01276 61203
