UK: Autumn Statement Highlight - 17 November 2022
The Statement includes some significant tax increases, primarily through the freezing of tax thresholds and the reduction in some tax exemptions and allowances.
The tax announcements include:
- Income Tax:
- The threshold for the additional (45%) rate will reduce from £150,000 to £125,140
- The Income Tax thresholds will be frozen for a further two years, until 2028
- Dividend Allowance to be cut from £2,000 to £1,000 in 2023-24 and to £500 from April 2024
- National Insurance:
- The Employment Allowance will be maintained at £5,000 until 2026
- Employer threshold frozen until 2028
- Capital Gains Tax: the Annual Exempt amount will be reduced from £12,300 to £6,300 for 2023-24 and to £3,000 form April 2024
- Inheritance Tax: the Nil Rate Band of £325,000 will be frozen for an additional two years to 2028
- Research & Development tax credits: R&D tax relief for the SMEs deduction rate cut to 86% and the credit rate to 10% but increase the rate of the separate R&D expenditure credit from 13% to 20%
- Stamp Duty Land Tax (SDLT): the SDLT cuts announced at the Mini-Budget will now be time limited, ending on 31 March 2025
- Energy Profits Levy: increase to 35% from January 2023 until 2028
- VAT: the VAT registration threshold will be held at £85,000 until March 2026
- Electric Vehicles: will no longer be exempt from Vehicle Excise Duty, from April 2025
Further details to follow in our full summary, which will be published shortly.