Autumn Statement 2022 summary
17th November 2022: Today, the Chancellor of the Exchequer, Jeremy Hunt, announced the Autumn Statement with plans for “stability, growth, and public services”.
Here we’ve rounded up a summary of some of the key points unveiled.
Taxes
- The threshold which higher earners start to pay the 45p rate will reduce to £125,140 from £150,000.
- Income Tax, Inheritance Tax and National Insurance thresholds will be frozen for a further two years until April 2028.
- The Dividend Allowance will reduce to £1,000 next year, down from £2,000, and £500 from April 2024.
- The Annual Exempt Amount in capital gains tax will be reduced from £12,300 to £6,000 next year and then £3,000 from April 2024.
- The National Living Wage will be increased by 9.7% to £10.42 an hour, giving a full-time worker a pay rise of over £1,600 a year, benefitting 2 million of the lowest paid workers.
Corporation Tax
Reforms are due to be implemented by the OECD (Organisation for Economic Co-operation and Development) and agreed internationally which will make certain that multinational corporations pay their fair share of tax.
Corporation Tax will increase to 25% from April 2023.
Employer National Insurance
Employer National Insurance contributions will be fixed until April 2028. Although the Employment Allowance is set to continue to protect 40% of businesses from paying any NICS.
Business rates and Transitional Relief Scheme
The Chancellor announced a package of support for business rates payers in England of £13.6 billion. The multiplier will be frozen in 2023-24.
A £1.6 billion Transitional Relief scheme has been announced to cap bill increases to help businesses adjust to the revaluation of their properties, which takes effect from April 2023. Increases for smaller properties will be limited to 5%. Downward transitional reliefs caps have been abolished. This means those with a reduced bill will see the benefit.
Following new property revaluations, some small businesses may lose eligibility for either Small Business or Rural Rate Relief. Their bill increases will be capped at £50 a month through a new separate scheme.
Research & Development Budget
The Chancellor recommitted to the £20 billion R&D budget.
Road Tax for Electric Vehicles
From 2025, road tax will be introduced for Electric Vehicles, meaning that all motorists pay.
Stamp Duty
Cuts to stamp duty will now end on 31st March 2025.
The Chancellor of the Exchequer Jeremy Hunt said:
“There is a global energy crisis, a global inflation crisis and a global economic crisis. But today with this plan for stability, growth and public services, we will face into the storm. We do so today with British resilience and British compassion.
“Because of the difficult decisions we take in our plan, we strengthen our public finances, bring down inflation and protect jobs.”
You can read details of the full Autumn Statement here.
Our advisory services at McKenzies
So, if you’re feeling a little bewildered by all the changes over the past few weeks, don’t worry – you’re not alone! We hope this article has given you a quick overview of what to expect and how to prepare. And remember, our accountants are always here to offer advice with your Tax Planning, Financial Forecasting And Budgeting, so please do get in touch if there’s anything you need help with.