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.

TAX THRESHOLDS CUT/FROZEN

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.

DIVIDEND TAX ALLOWANCE REDUCED

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.

CAPITAL GAINS TAX

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.

NATIONAL MINIMUM WAGE / NATIONAL LIVING WAGE

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:

• The level at which house-buyers begin to pay stamp duty is doubled from £125,000 to £250,000.
• First-time buyers will pay NO stamp duty on homes worth £425,000, up from £300,000.
• There is an increase in the value of the property on which first time buyers can claim relief, from £500,000 to £625,000.

 

CONFIRMATION OF CORPORATION TAX INCREASE

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.

VAT REGISTRATION AND DEREGISTRATION THRESHOLDS

The VAT registration (£85,000) and deregistration (£83,000) thresholds will not change for a further period of 2 years from 1 April 2024.

EMPLOYMENT ALLOWANCE

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.

REFORMS TO RESEARCH & DEVELOPMENT (R&D) TAX RELIEFS

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%.

BUSINESS RATES

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.

ELECTRIC VEHICLES

The Government is setting rates for company car tax until April 2028. Rates will continue to incentivise the take up of electric vehicles:

• Appropriate percentages for electric and ultra-low emission cars emitting less than 75g of CO2 per kilometre will increase by 1 percentage point in 2025-26; a further 1% in 2026-27 and a further 1% in 2027-28 up to a maximum appropriate percentage of 5% for electric cars and 21% for ultra-low emission cars.
• Rates for all other vehicles bands will be increased by 1 percentage point for 2025-26 up to a maximum appropriate percentage of 37% and will then be fixed in 2026-27 and 2027-28.

 

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.

Last modified on Thursday, 17 November 2022