Summary of November 2022 Autumn Statement

Summary of November 2022 Autumn Statement

If you have any concerns about your business or tax affairs in the coming months, please get in touch with us.

Business Rates

Business rates in England will be updated from 1 April 2023 to reflect changes in property values since the last revaluation in 2017. A package of targeted support has been announced to help support businesses with this change, including:

  • Freezing the business rates multiplier for another year
  • Extended and increased relief for retail, hospitality and leisure businesses
  • Reforming Transitional Relief
  • Protection for small businesses who lose eligibility for either Small Business or Rural Rate Relief.

Income Tax

The Additional Income Tax Rate threshold will be reduced to £125,140 from £150,000, with effect from 6 April 2023. 

The Higher Income Tax Rate threshold will remain frozen at £37,700 and the personal tax allowance will remain at £12,570 through to April 2028.

Income Tax and Dividend Income

The current £2,000 dividend tax-free allowance will reduce to £1,000 from April 2023 and drop further to £500 from April 2024.

The 1.25% increase in the tax rates payable on dividend income, which took effect in April 2022 remains in place.

National Insurance

The National Insurance contributions (NICs) Upper Earnings Limit (UEL) and Upper Profits Limit (UPL) that were already set until April 2026 will be maintained until April 2028.

The 1.25% rise in National Insurance contributions (NICs) that came into effect at the start of the 2022-23 tax year on 6 April 2022 was reversed on 6 November 2022. There have been no further changes declared and the cancellation of the ring-fenced Health and Social Care Levy of 1.25% due to be introduced from April 2023 stays in place and will not go ahead as originally planned.

Capital Gains Tax

The Chancellor announced a reduction in the annual exempt amount applicable to Capital Gains Tax (CGT) at £12,300 from April 2021 to April 2026 will now be reduced to £6,000 from April 2023 and further reduced to £3,000 from April 2024.

Corporation Tax

From1 April 2023, there will be two rates of Corporation Tax.

  • Taxable profits up £50,000 will continue to be taxed at 19%.
  • Taxable profits more than £250,000 will be taxed at 25%.
  • Profits between £50,000 and £250,000 will be subject to a marginal tapering relief. 

Corporation Tax – R&D Relief

The Research and Development Expenditure Credit (RDEC) rate will increase to 20% (from 13%) with effect from 1 April 2023. From the same date, 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%.

R&D tax reliefs will be reformed to support modern research methods such as data and cloud costs. There will be the emphasis to target abuse and improve compliance. 

Inheritance Tax

The nil-rate band will continue to be £325,000 and the residence nil-rate band at £175,000 up to April 2028.

VAT

The 20% VAT rate will remain unchanged. The £85,000 registration limit and the £83,000 deregistration limit will now remain at these levels until 31 March 2026.

Company Car Tax

The rates of company car tax that apply until April 2028 will continue to incentivise the take up of electric vehicles:

  • The percentages for electric and ultra-low emission cars emitting less than 75g of CO2 per kilometre will increase by 1% in 2025-26; a further 1% in 2026-27 and a further 1% in 2027-28 to a maximum percentage of 5% for electric cars and 21% for ultra-low emission cars.
  • The rates for all other vehicles will be increased by 1% for 2025-26 up to a maximum appropriate percentage of 37% and will then be fixed in 2026-27 and 2027-28.

National Living Wage to increase

This will increase to £10.42 per hour (previously £9.50) from 1 April 2023.

The full changes to the National Minimum Wage rates from 1 April 2023 are as follows:

  • The 21 to 22 year-old rate will be £10.18 per hour
  • The 18 to 20 year-old rate will be £7.49 per hour
  • The 16 to 17 year-old rate will be £5.28 per hour
  • The apprentice rate will be £5.28 per hour

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