After some significant announcements (some of which were swiftly rolled back) in September’s mini-Budget, the UK’s 2022 Autumn Statement was relatively quiet from an employment tax perspective.
The most notable issues, in fact, were in the main those where no changes were announced – such as the off-payroll working rules where the 2017 and 2021 reforms look set to stay.
The appropriate percentages for electric and ultra-low emission cars (those emitting less than 75g/km of CO2) will increase by 1% in 2025-26, with a further 1% increase in both 2026-27 and 2027-28. This will increase the percentages to 5% for electric cars and 21% for ultra-low emission cars in 2027-28. There is currently no change for zero-emission vans. Even with the introduction of Vehicle Excise Duty from April 2025 for electric cars there will still be large tax benefits compared to their petrol and diesel equivalents and, additionally, HM Revenue & Customs (HMRC) has separately announced that the fuel-only mileage rates for electric cars will increase from 5p to 8p/mile from 1 December, reflecting the increasing cost of electricity.
Following the reversal of the Health & Social Care Levy in the government’s earlier Growth Plan, the Employer NIC threshold (currently £9,100 a year) will now be frozen until April 2028 and the Employment Allowance of £5,000 will be retained in its current form. Blended rates for the 2022-23 tax year, which should be used for payment of annual NIC charges, have previously been announced. The main rates are 14.53% for employers and 12.73% for employees.
National Living Wage and National Minimum Wage
Hourly rates will increase by between 9% and 10% from 1 April 2023, with the rates for over 23s increasing to £10.42 an hour. The accommodation offset will increase to £9.10 an hour, an increase of only 4.6%.
In-work progression offer
There will be a phased roll out from September 2023 of this scheme where individuals working and in receipt of Universal Credit will be required to meet with Jobcentre Plus staff to work towards increasing their work hours or earnings.
There was no further mention of any IR35 reform, but the background documents released alongside the Autumn Statement confirmed that the government had drawn up its financial estimates on the basis of the current off-payroll working rules. The existing 2021 rules should, therefore, be considered to be remaining in place going forward.
Company Share Ownership Plan
The previously announced increases to the value of shares allowable under the plan from £30,000 to £60,000 and the increased scope of shares over which such options can be granted have not been repealed and are expected to go ahead from April 2023.