With the Governor of the Bank of England’s comments this month regarding interest rates and inflationary pressures over the next 18 months to 2 years, the Autumn Statement did not provide relief for the majority of UK taxpayers.

Key Announcements

Individuals

• The additional rate threshold will reduce from £150,000 to £125,140 from April 2023.
• The current personal allowance of £12,570, other income tax and national insurance thresholds will remain at their current level until April 2028.
• The inheritance tax thresholds will remain at their current level until April 2028.
• The tax-free dividend allowance will reduce to £1,000 for 2023/24 and to £500 from 2024/25.
• The tax-free capital gains tax annual exemption will reduce in 2023/24 to £6,000, and to £3,000 from 2024/25.
• The stamp duty land tax threshold increases announced in September 2022 will reverse in April 2025.
• The Energy Price Guarantee will increase to £3,000 from April 2023.
• The Secretary of State for Work and Pensions will publish a review into the state pension age in early 2023. The pension triple lock remains protected with a 10.1% state pension increase in April 2023.
• The lifetime cap on care costs has been delayed by a further 2 years.
• Councils will be able to increase council tax by 5% without local agreement.

Business

• The employer national insurance threshold of £9,100 will remain at its current level until April 2028.
• Class 2 national insurance will increase to £3.45 a week for 2023/24.
• The current VAT registration/deregistration threshold of £85,000 will be fixed until April 2026.
• The annual investment allowance is set permanently at £1m from April 2023.
• The ATED charge will increase by 10.1% for 2023/24.
• Those providing company cars, will need to factor in the cost of the introduction of road tax for electric cars, vans and motorcycles from April 2025. Changes to the related benefit in kind rates up to April 2028 have also been announced.
• The September 2022 SEIS and CSOP announcements will proceed.
• The Government remains supportive of the EIS and VCT regimes and see value of extending them in the future.
• Under the Research & Development tax regime, from April 2023 the SME additional deduction will reduce to 86%, the SME tax credit to 10%, with RDEC set to increase to 20%.
• From April 2023 transfer pricing documentation will need to be kept and retained in a prescribed and standardised format in line with OECD’s transfer pricing guidelines.
• Anti-avoidance legislation will be introduced covering share exchanges between UK resident close companies and non-UK resident companies, deeming that the replacement foreign shares continue to be located in the UK where the individual has a material interest (effective from 17 November 2022).
• From April 2023 the national living wage will increase to £10.42 an hour for those aged 23 and over, with other minimum wage rates increasing.
• The apprentice rate will increase to £5.28 an hour from April 2023.
• The business rate revaluation expected in April 2023 will proceed; 5-year transitional targeted support to be made available.
• The proposed Online Sales Tax (OST) will not be introduced.
• In light of the fact there are now 630,000 more working age inactive individuals than pre-pandemic, the Department of Work and Pensions will review workforce participation concluding in early 2023.
• There will be a refocus of the Investment Zone Programme, further announcements to follow.
• The Energy Bill Relief Scheme will be reviewed to determine the level of support to be offered to businesses beyond 31 March 2023.
• The Office of Budget Responsibility forecasts inflation to fall to 3.8% in Q4 of 2023 and below 2% by Q2 of 2024, turning negative between Q3 of 2024 and Q2 of 2026.
• Finally, a mayoral deal announced for my home county of Cornwall, devolving some powers to the county once agreed!

With a general election to take place by January 2025, no doubt some of the “permanent” and 2028 statements will change either immediately before or after!

If you wish to discuss your tax affairs with us and how the Autumn Statement may impact you or your business, please get in touch.