Autumn Statement 2023

The Chancellor, Jeremy Hunt, today unveiled the Governments tax and spending plans in the Autumn Statement.

With inflation falling to 4.6% in October 2023 (11% last autumn), Jeremy Hunt’s focus was on growing the economy and making work pay.  Large businesses will welcome measures to make permanent the “full expensing” of eligible capital expenditure, although this will offer little real help to smaller business who already benefit from the £1m Annual Investment Capital Allowance relief.

Smaller businesses will however welcome the announcement of a business rates support package worth £4.3 billion over the next five years, with measures that include the freezing of the small business rates multiplier for a fourth consecutive year and the extension of the retail, hospitality and leisure rates relief.

As usual, the devil is in the detail, and the Treasury documents contain far more information than the headlines.

We have listed the important announcements below, but please give us a call on 01228 711888 or our Dumfries office number on 01387 270340 if you have any queries about how these might affect you or your business.

Read our Autumn Statement Summary in full

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%.

Mini-Budget 2022 Summary

Kwasi Kwarteng today delivered his first ‘mini-Budget’, although with the number of tax announcements made it should have been billed as a ‘big-Budget’.

The Government is committed to an economy based on high growth and efficiency and simplified lower taxes, which will help people keep more of the money they earn and drive business investment.

Whilst some announcements had been leaked beforehand, there were still a few bombshells that we were not expecting and a raft of tax cuts which should benefit all and hopefully stimulate growth in the economy.

Check out the main announcements below and give us a call if you have any queries.

Alcohol Duty

• Planned increases in the duty rates for beer, cider, wine and spirits, which were due to come in from 1 February 2023, will no longer go ahead and the current rates will be frozen.

Annual Investment Allowance

• Scrapping the planned reduction of the 100% Annual Investment Allowance for investment in plant and machinery from £1,000,000 down to £250,000 from April 2023.  Instead, this will permanently remain at £1,000,000 to encourage business investment.

Corporation Tax

• A reversal of the previously announced increase in the Corporation Tax rate from 19% to 25%, which was due to come in from April 2023.  Companies will therefore continue to pay 19% tax.

Income Tax

• Cut in the basic rate of Income Tax from 20% to 19% from April 2023 to allow people to keep more of their money.  This applies to taxpayers in England, Wales and Northern Ireland.
• Abolish the additional 45% rate of Income Tax on annual income over £150,000 from 6 April 2023.  This applies to taxpayers in England, Wales and Northern Ireland.  From April 2023 there will only be a single higher rate of Income Tax at 40%.
• Reverse the 1.25% increase in the dividend tax rates from April 2023; with tax being due at the rate of 7.5% for dividends in the basic rate band and 32.5% for all other dividends.  The first £2,000 of taxable dividend income will remain tax-free.

Investment Zones

The Government are in discussion with 38 local authorities, including Cumbria County Council, to establish investments zones in England, and intend to work with the devolved administrations to drive local growth in Scotland, Wales and Northern Ireland. We are still awaiting further details, but the Government has stated that these investment zones will benefit from:

• Lower taxes with time limited tax benefits for businesses in the designated areas
• Accelerated development to release more land and ease planning restrictions

The sites in England will benefit from a range of time-limited incentives over 10 years with the following incentives under consideration:

• 100% Business Rates relief on newly occupied business premises
• Enhanced Capital Allowances with a 100% first year allowance for qualifying expenditure on plant and machinery for use in the investment zones
• Enhanced Structures and Buildings Allowance with accelerated relief to allow businesses to reduce their taxable profits by 20% of the cost of qualifying non-residential investment per year, so that 100% of the cost is written off for tax over 5 years
• Zero rate of Employers National Insurance contributions on salaries of any new employees working in the investment zone, for at least 60% of their time, on earnings up to £50,270 per year
• Full Stamp Duty Land Tax relief for land and buildings bought for commercial use or development and for purchases of land or buildings for new residential development

National Insurance

• A reversal of the 1.25% rise in National Insurance contributions for employers, employees and the self employed, which was introduced in April 2022.  This will take place from 6 November 2022.
• Scrapping the 1.25% NHS Health and Social Care Levy which was to be introduced in April 2023.

Off-payroll Working (IR35)

• Reforms introduced in 2017 and 2021 to determine whether contractors should be taxed as employees will be repealed from 6 April 2023; reducing administration for businesses and placing the burden back on contractors.

Stamp Duty

• An increase in the zero rate Stamp Duty Land Tax (SDLT) band for residential property bought in England and Northern Ireland from £125,000 to £250,000 from today onwards.
• An increase in the level first-time buyers in England and Northern Ireland start paying SDLT from today from £300,000 up to £425,000.
• An increase in the first-time buyers maximum property value threshold in England and Northern Ireland from £500,000 to £625,000 from today.

Spring Budget 2022 Summary

On Wednesday 23 March 2022 Rishi Sunak delivered his Spring Budget amidst a time of global uncertainty.

His speech opened by confirming our commitment to assisting Ukraine with their fight against Putin’s invasion, but this came with a warning to the British public that the global instability presents a risk to our recovery.

That said, Rishi went on to offer reassurances that unemployment forecasts were unaffected and inflation was expected to be back under control by 2024.

There were a few welcome surprises in the way of reduced fuel duty and National Insurance reductions, but you can read our full summary document below, or take a look at the handy headline summaries also below.

Our Spring 2022 Tax Guide can be viewed below by clicking on the link.

Spring Budget 2022 Predictions

Wednesday 23 March will see Rishi Sunak deliver his 2022 Spring Budget.   With rising bills causing a cost of living crisis, and the public purse severely depleted due to Covid, our Tax Specialists will be watching the announcement to see how it will affect you.

All will be revealed on the day, but whilst we wait to see what the Chancellor has in store, take a look at our predictions video.

 

Scottish Budget 2021

9 December 2021 saw Kate Forbes, the Scottish Finance Secretary, set out the Scottish Government’s spending plans for 2022/23.

Whilst Rishi Sunak’s Budget on 27 October 2021 contained some measures that were of interest to Scottish residents, Kate announced today that the Scottish purse, which this year is smaller due to Brexit and the withdrawal of Covid funding, will maximise the funds available to them to deliver key priorities and will focus on giving resources to low income households.

Scottish residents have reason to be optimistic though, as forecasts suggest that the Scottish economy will return to pre pandemic levels by spring of 2022.

There were lots of funding announcements for projects focusing on climate change, health and social care, education, ending homelessness, providing affordable housing, tackling child poverty and helping families with the costs of school lunches, uniforms and travel costs.

The following announcements will however be welcomed by many:

• Business rates relief for retail, hospitality and leisure businesses who will receive a 50% reduction in their business rates for the first three months of 2022, to support them in their return to more normal levels of trading
• Income Tax rates will remain frozen for the 2022/23 tax year, with the tax free personal allowance of £12,570 remaining frozen through to April 2026*
• The Income Tax starting and basic rate bands will see inflationary increases, thus helping those on lower incomes keep more of their money*
• A public sector pay policy with a floor of £10.50 per hour will be introduced, increasing wages for the lowest paid workers
• Increase in the Scottish Child payment, doubling it to £20 per week from April 2022 and expanding eligibility to children aged 6 – 15 from December 2022 onwards
• Over £50million to support the farming sector in tackling climate and nature emergencies and to produce food more sustainably, including £10million for the National Test Programme to transform agriculture and £35.8million for agri-environment schemes

If you have any queries regarding any of the above announcements please do not hesitate to contact us.

*Scottish Income Tax rates 2022/23

Band	Income range	Rate
Starter rate	Over £12,570 – £14,732	19%
Basic rate	Over £14,732 – £25,688	20%
Intermediate rate	Over £25,688 – £43,662	21%
Higher rate	Over £43,662 – £150,000	41%
Top rate	Over £150,000	46%

Our 2022/23 Tax Guide now features all of the up-to-date Scottish rates.  Simply click the PDF below.

Autumn Budget 2021 Summary

Rishi Sunak delivered the Autumn Budget on Wednesday 27 October with pledges of increased support for many.  A complete overhaul of alcohol duties, support for working families, business rate reliefs and support for hospitals and the hospitality sector were on the agenda.  These, along with the increase to the minimum wage, will be welcome news to most.  However, whilst the numbers and forecasts are all positive and impressive, there remains little said about how this support is to be funded.  In fact Mr Sunak’s closing statement pledging to cut taxes by the end of this parliament goes against what many might have been expecting him to say.

With the growth of the economy predicted to recover quicker than anticipated, and unemployment to peak at half the rate previously expected, things appear very positive. However, there were warnings of the coming months being challenging and inflation rates expected to rise.

The tone of the speech was certainly that economic recovery is underway and emergency support is winding down.  A new Charter ensures that in ‘normal times’ the Government should only borrow to invest in future growth and prosperity.  We have of course not been living in ‘normal times’, however listening to the Chancellor today one would be forgiven for thinking the pandemic is over and the purse is full for spending.

Our experts have been busy dissecting all the information from the Chancellor’s statement and have created useful, jargon free summaries so you can understand how the Budget affects you and your business.