It comes as no surprise that the 2022 Autumn statement has little in way of tax cuts.
We summarise below the key announcements made by The Chancellor.
The personal tax thresholds for basic and higher rate taxpayers will be maintained at their current levels of £12,570 and £50,270.
The threshold for the additional rate of tax has been reduced from £150,000 to £125,140 effective 6 April 2023. This will bring more individuals within the threshold and increase current additional rate taxpayers tax bill by £1,243.00.
This increase applies to taxpayers in England, Wales, and Northern Ireland; Scotland has different tax rates.
The additional rate of tax for savings and dividend income will apply UK- wide.
Married couples’ allowance and Blind Person’s Allowance will be increased by 10.1% from 6 April 2023.
Dividend allowance will be reduced from £2,000 to £1,000 from April 2023, and £500.00 from April 2024
All national insurance thresholds for all classes will remain fixed at their current levels until April 2028.
The rate at which employer’s start to pay national insurance will be fixed at £9,100 from April 2023 until April 2028.
The employment allowance will remain at its current level of £5,000.
National Living Wage
From 1 April 2023, the government will increase the National Living Wage by 9.7% to £10.42 an hour for individuals aged 23 years and over.
The capital gains allowance will reduce from £12,300 to £6,000 from April 2023 and £3,000 from April 2024.
VAT registration and deregistration thresholds will be maintained at the current levels of £85,000 for an additional two years from 1 April 2024.
Annual Investment Allowances
Annual Investment Allowance has been confirmed at a permanent rate of £1 million from 1 April 2023.
Research and Development
For expenditure on or after 1 April 2023, the Research & Development Expenditure Credit rate will increase from 13% to 20%, the SME additional deduction will decrease from 130% to 86%, and the SME credit rate will decrease from 14.5% to 10%.
The SDLT cuts announced on the 23 Sep 22 will remain in place until Mar 2025. The nil threshold was increased from £125,000 to £250,000 for all purchases of residential properties, the nil threshold for first time buyers was increased from £300,000 to £425,000. These rates apply to purchasers in England and Northern Ireland.
The maximum purchase price for which First Time Buyers’ Relief can be claimed was increased from £500,000 to £625,000.
Energy price guarantee
The Energy price guarantee will continue from April 2023 though support will be less generous based on a higher average usage price of £3,000 up from £2,500.
The planned revaluation for England will proceed in April 2023 for business rates to reflect property values as at 1 April 2021. Current values have been in effect since April 2017 and are based on market values as at 1 April 2015.
A transitional rates scheme to phase in changes with the new values will be in place for 3 years following revaluation. The rates multiplier will be frozen in 2023-24 and relief provided to businesses in retail, hospitality, and leisure sectors from 50% to 75%.
Business can check with their local councils for other non-domestic relief that might be available to them. https://www.gov.uk/apply-for-business-rate-relief
Eligibility for start-up loans
The eligibility for start-up loans has been widened to include businesses that have been trading for up to 3 years. Qualifying business can borrow up to £25,000 (businesses that have been trading for up to 3 years, this was previously for businesses that had been trading for two years)
New second loans are available to businesses that have been trading for up to 5 years.
Find out more here.
Recovery loan scheme
The Recovery Loan Scheme, launched in April 2021 to help businesses recovering from the pandemic, has been extended to 2024. Details of the scheme and eligibility criteria can be found on the British Business Bank website FAQs
Electric cars, vans and motorcycles will begin to pay Vehicle excise duty in the same way as petrol and diesel vehicles from April 2025.
Company car taxes are going to be set up until April 2028 to provide long term certainty for taxpayers and industry in Autumn Finance Bill 2022.
Rates will continue to incentivise the take up of electric vehicles:
- appropriate percentages for electric and ultra-low emission cars emitting less than 75g of CO2 per kilometre will increase by 1 percentage point in 2025-26: a further 1% in 2026-27 and a further 1% in 2027-28 up to a maximum appropriate percentage of 5% for electric cars and 21% for ultra-low emission cars
- rates for all other vehicles bands will be increased by 1 percentage point for 2025-26 up to a maximum appropriate percentage of 37% and will then be fixed in 2026-27 and 2027-28.
The inheritance tax nil band rates will remain at the current levels.
£325,000, residence nil band rate £175,000 and the residence nil-rate band taper will continue to start at £2m.