Autumn Statement 2022

The statement began with a summary of expectations for the economy according to the Office for Budget Responsibility, which is required to publish an economic report at least twice a year.

Personal Changes

A few changes for individuals had already been confirmed ahead of the Autumn Statement, either as part of Kwasi Kwarteng’s mini-budget or its aftermath, these include:

  • Basic-rate income tax remains at 20% “indefinitely”
  • National Insurance increase has been scrapped
  • Dividend tax rates will remain unchanged.

Additional-rate income tax
One of the biggest announcements made by the Chancellor was the lowering of the additional-rate tax threshold from £150,000 a year to £125,140 as of 6 April 2023.

Income tax thresholds
The personal allowance threshold will remain frozen for a further two years, continuing until 2028, along with the higher-rate threshold and the National Insurance contributions (NICs) thresholds.

National Insurance
In July 2022, NICs thresholds were increased to be brought in line with the income tax personal allowance, and fixed until April 2026. The Chancellor today announced that this freeze will be maintained for an additional two years until April 2028.

Capital gains tax
In the statement, the Chancellor announced a cut to the capital gains tax (CGT) allowance, also known as the annual exempt amount, over the next two years.

Inheritance tax
The inheritance tax nil-rate is currently set at £325,000 until April 2026 and will remain at this rate for a further two years until April 2028.

Dividend allowance
The Chancellor announced that the dividend tax threshold will be slashed from £2,000 to £1,000 from April 2023 and then again to £500 the following year.

Vehicle excise duty
Electric vehicles will no longer be exempt from vehicle excise duty from April 2025.

In addition:

  • Stamp duty cuts remain until 2025
  • Pension triple lock upheld

 

Business Changes

Changes for businesses were also confirmed:

  • Corporation tax rises to 25% from 1 April 2023
  • IR35 reforms to stay
  • Bankers’ bonus cap abolished
  • Alcohol duty freeze cancelled
  • VAT-free shopping scheme cancelled

Employment allowance
The employment allowance will remain at its current level of £5,000, having increased to that amount in April 2022. This offers eligible employers relief on their class 1 NICs.

Business rates
The Chancellor confirmed that a business rates revaluation will still take place in April 2023, but also announced a set of changes, including:

  • Multipliers will be frozen in 2023/24 at 49.9p and 51.2p (instead of rising to 52.9p and 54.2p)
  • Relief for retail, hospitality and leisure will increase from 50% to 75%, equating to £110,000 per business in 2023/24
  • A transitional relief scheme
  • A new supporting small business scheme (SSBS) will take effect from 1 April 2023
  • Improvement relief, which was announced at Autumn Budget 2021, will now be introduced from April 2024 until 2028

More information about the following is also included in this comprehensive report:

  • Windfall tax
  • Annual investment allowance
  • R&D relief
  • National living wage increase
  • Online sales tax
  • VAT threshold

Energy Bills Support

The current energy bill support scheme – the energy price guarantee — only runs until April 2023, with a price guarantee levied to help British taxpayers with their rising bills.

To download the full Budget overview, click here.