The Chancellor, Jeremy Hunt, delivered the Autumn Statement on 17 November 2022. The key announcements are summarised below.
- Headline rates of income tax unchanged
- From 6 April 2023, the income tax additional rate threshold will reduce from £150,000 to £125,140
- Scottish income tax rates to be confirmed in Scottish budget (scheduled for 15 December 2022)
- Dividend Allowance reduced from £2,000 to £1,000 from 6 April 2023. This will further reduce to £500 from 6 April 2024
- Income tax personal allowance, higher rate threshold and National Insurance thresholds will be frozen until 5 April 2028
- Married Couple’s Allowance and Blind Person’s Allowance will be uplifted by 10.1%, from 6 April 2023
- Capital gains tax annual exempt amount will reduce from £12,300 to £6,000 from 6 April 2023. This will further reduce to £3,000 from 6 April 2024
- Inheritance tax nil-rate band of £325,000 and residence nil-rate band of £175,000 will be frozen until April 2028.
- Increase in corporation tax rate to 25% for companies with profits over £250,000 will go ahead from April 2023
- Annual Investment Allowance confirmed at a permanent rate of £1 million from 1 April 2023
- Research & Development Expenditure Credit (RDEC) will increase from 13% to 20% from 1 April 2023. The SME additional deduction will decrease from 130% to 86% and the SME credit rate will decrease from 14.5% to 10% from the same date
- Consultation on reforms to “simplify and modernise” the existing creative sector tax reliefs launched
- From 1 January 2023, the Energy Profits Levy for oil and gas companies will increase from 25% to 35%. A 45% Electricity Generator Levy has been introduced on electricity generators. Both measures will remain in place until 31 March 2028
- OECD Pillar 2 rules will be implemented for a minimum global corporate tax rate of 15%, for accounting periods beginning on or after 31 December 2023
- Bank Corporation Tax Surcharge will be 28% on profits above £100 million from April 2023
- Diverted Profits Tax will increase to 31% from April 2023.
- Electric vehicles will no longer be exempt from Vehicle Excise Duty (road tax) from 1 April 2025
- VAT registration and deregistration thresholds will remain the same until April 2026. Current registration threshold is £85,000
- National living wage increased from £9.50 to £10.42 for over-23s
- Increases to SDLT thresholds announced in the September ‘mini-Budget’ will now end on 31 March 2025
- Changes to SEIS and CSOP rules announced in the mini-Budget will still be introduced
- Annual Tax on Enveloped Dwellings (ATED) – 2023-24 annual chargeable amounts increased in line with inflation (10.1%)
- Additional HMRC resource to tackle tax fraud and tax compliance risks amongst the wealthiest taxpayers.
“Often, when looking at the tax announcements in Budgets and other fiscal events, the devil is in the detail. This Autumn Statement – given by a Chancellor determined to set a tone of fiscal responsibility and avoid any potential aftershocks which might shake market confidence – looks to be an exception. As expected, the overall picture is one of rising taxes. For individuals, this is largely achieved through freezing or reducing thresholds – with the income tax additional rate threshold and the capital gains tax annual exempt amount notable examples.
The Chancellor has also announced additional funding for HMRC to focus on, amongst other things, reducing non-compliance amongst wealthy taxpayers. Overall, HMRC’s budget is set to reduce over the coming years, however, which is likely to put further pressure on their delivery of normal services such as registrations and repayments, as well as on the ongoing development of the Making Tax Digital programme, still due to roll out to income tax in April 2024.”
Robert Langston, National Tax Partner