Autumn Statement 2022

Autumn Budget 2022

The Chancellor, Jeremy Hunt, announced his Autumn Statement on 17 November 2022, with it’s clear aim of tackling inflation,  restoring economic stability, building long term prosperity and protecting both public services and the most vulnerable.

He unveiled £26billion of support for the cost of living crisis in addition to substantial increases in the State Pension, benefits and the National Living Wage, while confirming ring fenced spending for the NHS and Social Care and schools of £8bn and an additional £2.3bn respectively. He also committed to continued support for large infrastructure projects such as Sizewell C and Northern Powerhouse rail and protecting the £20bn R&D budget.
Will his measures succeed? Only time will tell.
This short article will just pull out some of the measures which our business and personal tax clients are most likely to be interested in.
If you would like more details, you can find the full document here:

Energy

Review of the Energy Price Guarantee (EPG)

This means that a typical household in Great Britain will pay £3,000 per annum (up from the current £2,500 per annum) from April 2023 to April 2024, saving £14 billion of government spending

Alternative Fuels Payment (AFP)

The government will double to £200 the level of support for households that use alternative fuels, such as heating oil, liquefied petroleum gas (LPG), coal or biomass, to heat their homes

Energy Efficiency Taskforce (EETF)

The government is announcing a new long-term commitment to drive improvements in energy efficiency to bring down bills for households, businesses and the public sector

Welfare, work and pensions

Cost of Living Payments

The government will provide households on means-tested benefits with an additional £900 Cost of Living payment in 2023-24.

Pensioner households will receive an additional £300 Cost of Living payment, and individuals on disability benefits will receive an additional £150 Disability Cost of Living payment in 2023-24

Benefits

The government is protecting the most vulnerable in society by increasing benefits and also raising the benefits cap by 10.1% in line with inflation 

Alongside this increase in benefits, the DWP is to receive additional investment of £280m between now and 2024-25 towards tackling fraud and mistakes, aiming to deliver gross annual savings of £2.2bn by 2027-28

National Living Wage (NLW) and National Minimum Wage (NMW) increases from April 2023

  • NLW for those aged 23 and over will increase by 9.7% to 10.42 per hour, with other National Minimum Wages agreed as below:
  • 21-22 year olds: £10.18 an hour (10.9% increase)
  • 18-20 year olds: £7.49 an hour (9.7%)
  • 16-17 year olds: £5.28 an hour (9.7%)
  • Apprentice rate: £5.28 an hour (9.7%)
  • Accommodation offset rate: £9.10 an hour (4.6%)

TAX

  • Additional Tax (45p) threshold reduced to £125,140. 
  • Class 2 and Class 3 National Insurance Rates are to be increased in line with inflation of 10.1% to £3.45 and £17.45 per week respectively
  • All other personal income tax and national insurance thresholds are to be maintained at current levels until April 2028
  • The inheritance tax and residence nil-rate bands are to remain set at current levels until April 2028 –  £325,000 and £175,000 respectively
  • 0% Dividend Allowance to be reduced from £2000 per annum as it is currently, to £1000 per annum from April 2023, then £500 per annum from April 2024
  • CGT (Capital Gains Tax) annual exemption to be reduced from £12,300 to £6,000 from next April then to £3,000 from April 2024
  • Married Couples’ and Blind Persons Allowances to increase by 10.1% from 2023-24 tax year, to between £4,010 and £10,375 for the former, and to £2,870 for the latter
  • SDLT (Stamp Duty Land Tax) growth plan thresholds to be kept only until 31 March 2025, rather than permanently as originally announced
  • ATED (Tax on enveloped dwellings) will be uplifted by of 10.1% for the 2023-24 ATED charging period
  • Local authorities in England have been given greater authority to increase council tax without referendum – up to 3% per annum from April 2023
  • Diverted Profits Tax will increase from 25% to 31%, in order to retain a 6 percentage points differential above the main rate of Corporation Tax
  • VAT registration threshold to remain at £85,000 and deregistration threshold to remain at £83,000 until March 2026
  • Energy Profits Levy (EPL) to increase from 25% to 35% from 1 January 2023
  • There will also be a new temporary levy of 45% put on extraordinary returns from low-carbon UK electricity generation
  • Vehicle Excise Duty (VED) will be required to be paid on electric vehicles from April 2025, initially at the lowest rate available of £10pa, but then at standard rate of £165pa
  • Company Car Tax BiK (Benefit in Kind) rates on electric vehicles to increase by 1% per annum from 2025-26 and for the next two years, to a maximum of 5% for EVs and 21% for ultra low emission cars
  • Van benefit charges and car and van fuel benefit charges to increase by 10.1% from 6 April 2023
  • 100% First Year Allowance for electric vehicle charge points to be extended to 31 March 2025 for corporation tax purposes and 5 April 2025 for income tax purposes
  • There will be no online sales tax introduced
  • Business Rates will be updated from 1 April 2023 to reflect changes in property values since the last revaluation in 2017
    • But there will be additional reliefs for the smallest businesses and certain sectors, such as retail, leisure and hospitality
  • Super-deduction will be scrapped from 31 March 2023 as originally planned
  • R&D (Research and Development) Tax Relief to be increased for large organisations, but decreased for the SME sector from 130% to 86%,  with the tax credit also decreasing from 14.5% to 10%

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