Jeremy Hunt delivered his first Autumn Statement this afternoon and has promised the government will deliver a plan to tackle the cost-of-living crisis and rebuild the UK economy. The chancellor says his priorities are stability, growth, and public services, and is providing “fair solutions” despite taking “difficult decisions”.
With this, the Chancellor has announced tens of billions in tax rises and spending cuts. He also acknowledged that the UK was in recession but said his plan would help rebuild the economy and reduce debt.
Here we have summarised some of the key points from his statement.
Personal Taxes
- Personal tax thresholds frozen, including the personal allowance for income tax and the nil rate band for inheritance tax for a further two years, on top of an existing four-year freeze, to April 2028.
- National insurance thresholds will also be frozen for a further two years, to April 2028.
- The threshold for the additional rate of tax will be cut from £150,000 to £125,140.
- The dividend allowance will be cut from £2,000 per annum to £1,000 next year and again to £500 in 2024-25. The dividend tax rate will still rise by 1.25%.
- The annual exempt allowance for capital gains tax will also be cut from £12,300 to £6,000 next year and again to £3,000 in 2024-25.
Business Taxes
- Corporation tax will still rise from 19% to 25% from 1 April 2023.
- National insurance thresholds for employers’ national insurance has been frozen, again until April 2028.Employment allowance will be retained at a higher level of £5,000.
- A 35% levy on oil and gas company profits and a new temporary 45% levy on electricity producers.
- For expenditure on or after 1 April 2023 for Large Companies, the R&D Expenditure Credit (RDEC) will increase from 13% to 20%.
- The Small Managed Enterprises (SME) deduction will decrease from 130% to 86% and the SMA tax credit will decrease from 14.5% to 10%.
Minimum Wage
- Minimum wage will rise to £10.42 an hour for staff over the age of 23, up to £10.18 an hour for 21–22 year-olds and up to £7.49 an hour for 18-20 year olds.
Further Information
If you would like to discuss how these changes in tax policy may affect you and/or your business, please contact your usual NRB advisor or our tax team.
The Autumn Statement 2022 Speech
The Autumn Statement 2022 speech – GOV.UK (www.gov.uk)
The Autumn Statement 2022 Documents
Autumn Statement 2022: documents – GOV.UK (www.gov.uk)
The content of this Autumn Statement summary is intended for general information purposes only. The content should not be relied upon in its entirety and shall not be deemed to be or constitute advice.
While we believe this interpretation to be correct, it cannot be guaranteed and we cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained within this summary. Please obtain professional advice before entering into or altering any new arrangement.
