Autumn Statement 2022: The Key points

1 month, 2 weeks ago by Oliver Atkinson

After the September Mini Budget - U Turn, new Chancellor Jeremy Hunt has delivered his first Autumn statement to the House of Commons, detailing a wide variety of adjustments to tax rates and allowances for the coming tax year and beyond. There are also several other measures included in the government’s fiscal plan worth looking at, so let’s get started.

Main Tax Rates & Allowances

• The National Living Wage and Minimum Wage is set to rise by at least 9.7% from April 2023. The wage increases in full are as follows:
  • 23 and over – from £9.50 to £10.42
  • 21 to 22 – from £9.18 to £10.18
  • 18 to 20 – from £6.83 to £7.49
  • 16 to 17 and Apprentices – from £4.81 to £5.28
• Starting from the upcoming tax year of 2023/24, the tax-free dividend allowance is to be cut from £2,000 to £1,000. This will see a further reduction in the 2024/25 tax year where it will be halved again to £500.
• After reversing the previous administration’s plan to abolish the 45p top rate, the government has now reduced the threshold at which the rate will be paid by earners. The threshold will be dropping from it’s current £150,000 to £125,140 from April 2023.
• The current thresholds for National Insurance, Inheritance Tax, and the Personal Allowance are to be frozen until 2028.
• Capital Gains Tax is also set to be reformed. Starting in the 2023/24 tax, year the tax-free allowance will reduce from it’s current threshold of £12,300 to £6,000, and then for 2024/25 this will be reduced again to £3,000.

Business Rates

• From the 1st of April 2023, a new revaluation of properties for business rates will come into effect. The Chancellor stated that compensation may be available for firms who are required to pay more but estimated that up to two-thirds of businesses will not pay any more than they currently do.
• Business Rates multipliers will be frozen in 2023/24 at 49.9p and 51.2p.

Corporation Tax

• From 1st April 2023, R&D Tax Credits for SMEs will be reformed in an effort to combat fraudulent claims. The current SME additional deduction rate will be cut from 130% to 86%, and the SME credit rate from 14.5% to 10%. The R&D Expenditure Credit will rise however, from 13% to 20%.
• The First Year Allowance on electric vehicle charge points will be extended until 31st March 2025.
• From April 2023, the Diverted Profits Tax will increase to 31% to retain it’s 6% differential with the main corporation tax rate.

Other Taxes and Changes

• The Stamp Duty Land Tax nil-rate band increase previously announced will now be a temporary measure, and will remain in place until March 2025
• The Chancellor has increased the windfall tax on energy companies to 45%.
• A plan for £600 billion of capital investment in transport infrastructure was announced.
• Starting in 2025, Electric Vehicles will be subject to vehicle excise duty from which they are currently exempt.
• The energy price gap guarantee is set to be extended for 12 months from April 2023, with energy bills capped at no more than £3,000.
• Pension triple lock to be maintained, meaning state pensions will rise following September’s inflation rate of 10.1% from April 2023. The same rate will also be applied to benefits. There were a larger than usual number of upcoming changes announced in the Chancellor’s Autumn statement, and over the next few months we will aim to publish articles that look at some of aforementioned changes in more depth in order to see how they might affect you and your business.

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