AUTUMN STATEMENT 2022

The Chancellor, Jeremy Hunt announced his 2022 Autumn Statement, the third fiscal event or budget, in the UK's parliament in few months. The government has reversed nearly all the measures in the Growth Plan 2022.

The Autumn Statement 2022 sets out steps on taxation and spending, ensuring contributions are broadly balanced and is the way to repairing the public finances, while protecting the most vulnerable.

Taxes are raised largely by relying on threshold freezes and fiscal drag rather than headline rate increases. The government intends to encourage medium term growth plan by Investment in energy efficiency and independence, infrastructure and targeted support for businesses.

Self-Assessment & Income Tax

The current tax-free Personal Allowance of £12,570 will be frozen until 2028
The threshold for the highest rate of tax will be £125,140. The additional tax rate of 45% will be payable above £125,140
Individuals with income of more than £100,000 will continue to have their Personal Allowance tapered, with those on incomes of more than £125,140, not being entitled to any Personal Allowance.

Changes to NIC (National Insurance)

The main thresholds will remain frozen until April 2028.
The National Living Wage will increase for individuals aged 23 will be up by 9.7% to £10.42 an hour from April 2023.

Taxes on Dividends

Shareholders will start to pay tax on dividend income in excess of £1,000 (previously £2,000) in 2023/24, and where it exceeds £500 in 2024/25.
The tax rate continuing in future years at 8.75% for basic rates taxpayers, 33.75% for higher rate taxpayers and 39.35% for additional rate.

Company Taxes (CT)

The rate of corporation tax will increase from April 2023 to 25% from the current 19%.

The FYA for electric vehicle charge points will be extended to 31 March 2025

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Inheritance Tax reforms

NIL Rate Bands will remain frozen until April 2028. The nil-rate band is frozen at £325,000, the residence nil-rate at £175,000, and the residence nil-rate band taper will continue to start at £2 million.

VAT Threshold

VAT registration threshold of £85,000 and deregistration threshold of £83,000 will be maintained at current levels until 31 March 2026

Changes in Capital Gains Tax

The annual exemption will be reduced from £12,300 to £6,000 from April 2023, further reducing from April 2024 to £3,000.

Anti-avoidance legislation to prevent non-UK domiciled individuals from claiming the remittance basis in respect of dividends and gains arising from certain non-UK companies where there has been a share-for-share exchange from 17 November 2022 involving a UK company.

Research & Development (R&D)

The R & D Expenditure Credit (RDEC) rate will increase from 13% to 20% and (SME) additional deduction will decrease from 130% to 86%,

SME credit rate will decrease from 14.5% to 10%.

A consultation will be launched on the design of a single R&D scheme.

The government has taken unprecedented steps to help households deal with rising living costs and the energy crisis in 2022-23. The Energy Price Guarantee (EPG) will be maintained through the winter, limiting typical energy bills to £2,500 per year. From April 2023 the EPG will rise to £3,000.