Earlier today, the latest Chancellor, Jeremy Hunt delivered his Autumn Statement with the Governments main focus being to stabilise the UK economy and reduce inflation.
The Chancellor confirmed that the income tax personal allowance, higher rate threshold, main National Insurance thresholds and the inheritance tax thresholds will remain frozen at current levels for a further two years taking us to April 2028 (See table below).
Personal Allowance | £12,570 |
Higher Rate Threshold | £50,270 |
Employers National Insurance | £9,100 |
Employee's National Insurance | £12,570 |
Inheritance Tax (Single person) | £325,000 |
The Chancellor confirmed that the 45p rate threshold will be reduced from £150,000 to £125,140.
The dividend allowance will be cut from £2,000 to £1,000 from 6 April 2023. It will then be reduced to £500 from April 2024.
The Capital Gains Tax annual exempt amount will be cut from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024.
We detail below the new National Minimum/Living Wage rates from April 2023:
New Rate (From April 2023) | Current Rate (Since April 2022) | Percentage Increase | |
23 years old and over | £10.42 | £9.50 | 9.7% |
21-22 years old | £10.18 | £9.18 | 10.9% |
18-20 years old | £7.49 | £6.83 | 9.7% |
16-17 years old | £5.28 | £4.81 | 9.7% |
Apprentice Rate* | £5.28 | £4.81 | 9.7% |
*This rate is for apprentices under 19 or those in their first year. If the apprentice is 19 or over and past their first year, they will be entitled to the rate that applies to their age
If LBW process payroll on your behalf, we will automatically uplift any employee’s on National Minimum/Living Wage to ensure all legislation is met.
The Chancellor confirmed that there will be no changes to the stamp duty measures announced in the Mini-Budget, which are as follows:
From 1 April 2023, as previously confirmed, the planned increase in the headline rate of Corporation Tax to 25% for companies with over £250,000 in profits will go ahead.
A small profits rate of 19% will apply to profits of £50,000 or less.
Profits between £50,000 and £250,000 will be taxed at the main rate of 25% but marginal relief will apply.
The VAT registration (£85,000) and deregistration (£83,000) thresholds will not change for a further period of 2 years from 1 April 2024.
As previously announced, the Employment Allowance which gives relief for smaller businesses’ National Insurance payments will remain at £5,000 per annum. Essentially, this means that qualifying employers will not pay the first £5,000 of Employers National Insurance.
For expenditure on or after 1 April 2023, the small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86%, and the SME credit rate will decrease from 14.5% to 10%.
Subject to reliefs for specific sectors, with effect from 1 April 2023, there will be a wholesale reassessment of the value on which business rates are calculated and the multiplier will be frozen with effect from 1 April 2023.
The Government is setting rates for company car tax until April 2028. Rates will continue to incentivise the take up of electric vehicles:
As we have always maintained, with all matters referred to in the Chancellor’s announcements the “devil will be in the detail” and the full impact and understanding of all the announcements will not be made clear until the full parliamentary process has been undertaken and the proposals become law in the relevant finance act.
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