Autumn Statement 2022

Today saw Jeremy Hunt, the Chancellor of the Exchequer, deliver his first Autumn Statement.

With a big black hole to fill, and the need for economic stability, the Chancellor must ensure that his actions raise vital funds for the public purse, whilst providing assistance to those most in need during the current cost of living crisis.

As usual, the devil is in the detail, and the Treasury documents contain far more changes than the headline announcements made.

We have listed the important announcements below, but please give us a call on 01228 711888 if you have any queries about how these will affect you or your business.

There will be no increase in the tax-free personal allowance until April 2028 for all UK taxpayers.

The Higher Rate 40% Income Tax threshold for taxpayers in England, Wales and Northern Ireland, will be fixed till April 2028.

The Additional Rate 45% Income Tax threshold will reduce from £150,000 down to £125,140 from 6 April 2023 for taxpayers in England, Wales and Northern Ireland.

The dividend allowance, which is the amount of dividend income that can be received tax free in a tax year, will fall from £2,000 to £1,000 from 6 April 2023 and then down to £500 from 6 April 2024.

The Capital Gains Tax annual exemption, which is the amount of gain that can be made per tax year before tax becomes payable, will fall to £6,000 from 6 April 2023 and then down to £3,000 from 6 April 2024.

Electric cars, vans and motorcycles will have to pay Vehicle Excise Duty for the first time from April 2025 onwards.

Employees who are provided with purely electric company cars will see an increase in the benefit in kind tax charges on these vehicles up to 3% in 2025/26, 4% in 2026/27 and 5% in 2027/28.

The recently announced changes to the Stamp Duty Land Tax bandings, which will see people paying less duty on purchases, will remain in place till 31 March 2025.

It was announced that there will be no increase in the VAT registration threshold (currently £85,000) and the VAT de-registration threshold (currently £83,000) till March 2026.

The Government will guarantee the previously stated triple lock for State Pensions, which means that from April 2023 anybody who reached State Pension age after April 2016 will see an increase in their pension of 10.1%, taking the weekly amount up to £203.85.

Pension Credit will also be increased by 10.1% from April 2023 for the most vulnerable households, which will equate to an extra £1,470 per year for a couple and £960 for a single pensioner.

National Minimum/Living Wage

The National Living wage for those aged 23 and over will increase from 1 April 2023 from £9.50 up to £10.42 per hour.

The National Minimum Wage rates will also increase from 1 April 2023 as follows:

• Age 21 – 22     £10.18
• Age 18 – 20     £7.49
• Age 16 – 17      £5.28 (also applies to apprentices)

Class 2 National Insurance, which is paid by the self-employed, will increase from £3.15 to £3.45 from 6 April 2023.

Class 3 Voluntary National Insurance will increase from £15.85 to £17.45 from 6 April 2023.

From April 2023 to April 2024, the Government will adjust the Energy Price Guarantee which will see the energy price cap for a typical household increase from £2,500 per annum to £3,000.

The Government will also double to £200 the level of support for households that use alternative fuel, such as heating oil, LPG, coal or biomass boilers.

Research and Development (R&D) tax reliefs

For expenditure on or after 1 April 2023, the small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86%, and the SME repayable tax credit rate will decrease from 14.5% to 10%.

The Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20%, for expenditure on or after 1 April 2023.

Business Rates relief for retail, hospitality and leisure is being extended to 2023/24 and the rate of relief increased from 50% to 75%.