Main Announcements From The Autumn Statement 2022

Following on from his predecessor’s mini-budget, the new Chancellor, Jeremy Hunt, delivered the Autumn Statement this morning which focused on stability, growth and public services.

Set against a gloomy economic backdrop, he acknowledged that the UK was in recession and that “difficult decisions” were needed to “rebuild our economy” and reduce debt.

We’ve highlighted the main points announced today, which we will be followed by our Budget Summary tomorrow:

• The threshold for when the highest earners start paying the top rate of income tax will be brought down from £150,000 to £125,140 from April 2023.
• Income tax, personal allowance and higher rate thresholds will be frozen until 2028.
• The Inheritance Tax (IHT) nil rate bands are frozen until 2028.
• The Capital Gains Tax (CGT) Annual Exempt Amount will be reduced from £12,300 to £6,000 from April 2023, then to £3,000 from April 2024.
• The Dividend Allowance will be reduced from £2,000 to £1,000 from April 2023, and £500 from April 2024.
• In R&D Tax Credits, from April 2023 the rate of RDEC is increasing from 13% to 20%. The SME additional deduction is reducing from 130% to 86% and SME credit rate is reducing from 14.5% to 10%.
• Electric vehicles (EVs) will no longer be exempt from Vehicle Excise Duty from April 2025.
• The NICs Secondary Threshold for employers will remain at £9,100 until April 2028.
• The VAT registration threshold will remain at £85,000 for two years from April 2024.
• The National Living Wage (NLW) by 9.7% to £10.42 an hour from April 2023.

For companies, it is important to remember that the Corporation Tax rise to 25%, with effect from 1 April 2023, will now come into force and the cessation of the super-deduction for capital allowances will be implemented from the same date.

Head of EQ Taxation, David Morrison, commented,

“Today’s statement came as no great surprise and indeed the news delivered was not perhaps the hammer blow anticipated by many. The announcements made now provide certainty to businesses to allow them to start moving forward with their future plans. As always, your EQ team will be on hand to go over the measures announced and what that means for you and your business.”

We now await the Scottish Government’s response to this, but it would not be a major surprise if the Scottish Government reduced the income banding accordingly, and indeed they may choose to go further.  With tax personal allowances frozen too, the Scottish Government has a decision to make in that respect too.

You can read our full analysis of Autumn Statement here.

If you wish to discuss current or potential transactions, or any possible impact of the Budget, please contact our EQ Taxperts.