The Chancellor Jeremy Hunt today set out the government’s revised tax and spending plans in his Autumn Statement, following last month’s reversal of previously announced proposals. The latest key tax-related measures and updates are summarised below.
For more information on how the Chancellor’s announcements might impact you, your business or your household, GMcG Chartered Accountants’ 21-page Analysis publication gets behind the detail of the key tax measures. It also provides updates on previous announcements with expert insight and analysis on how you may be impacted. You can download GMcG’s Analysis publication HERE
Income Tax - Additional Rate 45% income threshold reducing from £150,000 to £125,140 from April 2023
Income Tax, National Insurance Contributions and Inheritance Tax – thresholds fixed to April 2028 (previously were fixed until April 2026)
Capital Gains Tax – Annual Exemption currently £12,300, reducing to £6,000 (from April 2023) and to £3,000 (from April 2024)
Dividend Allowance – currently the first £2,000 of annual dividend income is tax-free, reducing to £1,000 from April 2023 and to £500 from April 2024
National Insurance Contributions – Secondary Threshold (the point at which Employer contributions start) fixed at £9,100 to April 2028
National Minimum/Living Wage – rates to increase at April 2023, including rates for employees aged 23+ increasing from £9.50 to £10.42 per hour
Stamp Duty Land Tax - (England and Northern Ireland) the changes announced in September 2022 have been confirmed as a temporary measure until 31 March 2025 and then will revert to pre 23 September 2022 levels
Research and Development tax reliefs – for expenditure on/after 1 April 2023 incurred by Small and Medium Enterprises (SMEs), the additional deduction for qualifying R&D will decrease from a rate of 130% to 86% and the SME tax credit rate will decrease from 14.5% to 10%. The rate of the R&D Expenditure Credit (RDEC) for large companies and SMEs with qualifying RDEC expenditure will increase from 13% to 20%
Value Added Tax – registration and deregistration thresholds fixed at £85,000 and £83,000 until 31 March 2026
Vehicle Excise Duty – to be payable on electric cars, vans and motorcycles from April 2025
Company Car Tax – rates to be fixed until April 2028: Income Tax benefit-in-kind (BIK) charge on electric cars currently 2% of list price until April 2025, increasing by 1% each year thereafter (3% 2025/26, 4% 2026/27, 5% 2027/28); rates for other vehicles increasing by 1% at April 2025 and then fixed until April 2028
Van BIK Charge, Car/Van Fuel BIK Charges – inflationary increases in line with CPI, to be announced in December 2022
Capital Allowances – First Year Allowances for expenditure on electric vehicle chargepoints extended to 31 March 2025 (Corporation Tax) and 5 April 2025 (Income Tax)
Online Sales Tax – the government has decided not to introduce the OST
Income Tax – the following September 2022 proposals (due to come into effect at 6 April 2023) have all been reversed:
Corporation Tax – the September 2022 announcement that the increase in the Corporation Tax rate to 25% was to be cancelled has been reversed – Corporation Tax will now increase to 25% in April 2023
Stamp Duty Land Tax – the September 2022 changes have been retained but restricted to a temporary measure until 31 March 2025
IR35 – ‘Off Payroll working’ – the September 2022 proposal to abolish the public and private sector ‘off payroll working’ rules from 6 April 2023 has been abandoned
National Insurance Contributions – the September 2022 proposal to remove the additional 1.25% NIC payment has been retained and came into effect at 6 November 2022. The 1.25% Health and Social Care Levy also remains cancelled.
Capital Allowances – the September 2022 announcement making the 100% Annual Investment Allowance (AIA) permanent has been retained and so 100% AIA is now permanently in place
Seed Enterprise Investment Scheme (SEIS)– the September 2022 proposal to increase the availability of SEIS to investors and companies has been retained
Investment Zones – the September 2022 proposal for investment zones is undergoing an overhaul and refocus with more information to follow from the Government
Should you require any further information on how you may be impacted by any of the proposed changes, please contact any member of GMcG’s Tax Team who will be happy to discuss.
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