
Yesterday, Jeremy Hunt presented his much-anticipated Autumn Statement to the House of Commons. Following the political turmoil of recent weeks, this was an announcement designed to reassure markets that Rishi Sunak's government has a robust plan to reduce the deficit and take back control of fiscal stability.
So, did the chancellor deliver inline with expectations or has he been too draconian? Read on for our bitesize roundup of the key business takeaways for businesses from the Autumn Statement 22:
Corporation Tax
Will rise from 19% to 25% in April 2023 as expected. This u-turn had been announced several weeks prior to the Autumn Statement and you can find further details in our latest update here.
Income Tax
The chancellor confirmed a freeze on the personal allowance and higher rate thresholds until April 2028.
In addition, the top 45% additional rate of income tax will be paid on earnings over £125,140 (previously £150,000). This will not apply in Scotland.
Employers NIC
The current threshold will be frozen until April 2028.
Further, the Employment Allowance will be retained at the new, increased level of £5,000 until March 2026.
Capital Gains Tax (CGT)
The tax free allowance for capital gains will reduce in April 2023 from £12,300 to £6,000.
The allowance will then further reduce to £3,000 from April 2024 onwards.
Dividend Tax
The tax free allowance for dividends will reduce in April 2023 from £2,000 to £1,000.
The allowance will then further reduce to £500 from April 2024 onwards.
Value-Added Tax (VAT)
The VAT registration threshold will remain at £85,000 until April 2026.
In addition, tariffs on over 100 categories of imported goods will be removed or reduced. Further details on this measure will be announced in due course.
Research & Development (R&D) Tax Credits
From April 2023, SMEs utilising the R&D tax relief scheme will see the deduction rate reduce from 130% to 86% with the associated tax credit also reducing from 14.5% to 10%.
However, the rate of separate R&D expenditure credit (RDEC) will rise from 13% to 20%.
Energy Bills
The government intends to introduce more targeted support on energy bills for businesses, with the aim of protecting those struggling the most. Further details on this measure will be announced in due course.
For now, the Energy Bill Relief Scheme will remain in place until March 2023.
Business Rates
The chancellor announced a support package worth over £13.6 billion over the next 5 years, to help firms with business rates - This support will take shape through a mixture of freezes and reliefs.
A useful factsheet detailing the individual support measures can be found here.
National Living Wage
Will rise by 9.7% from April 2023 to an hourly rate of £10.42.
Vehicle Excise Duty (VED)
Electric vehicles (EVs) will no longer be exempt from Vehicle Excise Duty, from April 2025.
A comprehensive breakdown of all measures announced by the chancellor can be found through the government website here.
Should you have any concerns or wish to explore the announced changes in more detail, we would recommend speaking to your company accountant or tax advisor for further guidance.
Equally, if you're considering business finance to position your company for the road ahead, please don't hesitate to get in touch - From asset finance to trade finance, invoice discounting to commercial mortgages, we have you covered!
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