Autumn Statement 2022
Posted on 23rd November 2022 at 10:47
The Autumn Statement was announced by Chancellor Jeremy Hunt last week. It contained a number of measures that will have an impact on small businesses and landlords in the UK.
This is what you need to be aware of:
Business tax and National Insurance changes
Rate of Class 2 National Insurance to increase
From 6th April 2023, the rate of Class 2 National Insurance for self-employed people will increase to £3.45 per week.
VAT registration threshold remains at £85,000
The Chancellor confirmed that the threshold for VAT registration will remain at £85,000 worth of VATable sales until 1st April 2026.
Employment Allowance remains at £5,000
The Employment Allowance - which reduces or cancels out employer's National Insurance for certain employers - will remain at £5,000.
Corporation Tax remains at 19% for the smallest companies
From 1st April 2023:
companies that make a taxable profit of £50,000 or less per year will continue to pay Corporation Tax at the ‘small profits rate’ of 19%
companies with taxable profits between £50,001 and £250,000 a year will pay Corporation Tax at a rate of 25% with a ‘marginal rate relief’ deduction
companies with taxable profits of £250,001 or more a year will pay Corporation Tax at a rate of 25%
National Minimum Wage threshold are increased
From April 2023, all thresholds for the National Minimum Wage will increase.
The National Living Wage will increase by 9.7% to £10.42 an hour for those aged 23 and over.
Increase in bills capped for the smallest businesses affected by reductions in rate relief
Small businesses affected by reductions or changes in the eligibility to small business rate relief or rural rate relief, will see their bills capped at £600 per year from 1st April 2023.
Research and Development (R&D)
For expenditure on or after 1st April 2023, the Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20%. The small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86%, and the SME credit rate will decrease from 14.5% to 10%.
Personal tax and National Insurance changes
Additional rate of tax threshold reduced
The threshold for the additional rate of tax to be reduced from £150,000 to £125,140 from April 2023.
Changes to this and other Income Tax thresholds for non-savings and non-dividend income currently apply to England and Northern Ireland only.
The Scottish government will announce their own changes to Income Tax rates or thresholds.
The Welsh has never varied the Income Tax rates although it has the power to do so.
All other changes, including changes to the thresholds and where they apply to savings or dividend income, apply UK-wide.
All other Income Tax and National Insurance thresholds frozen until April 2028
The existing thresholds for all rates of Income Tax and National Insurance are to be frozen until April 2028, including the Personal Allowance.
Dividend allowance cut.
April 2023 - the dividend 0% tax allowance will be cut from £2,000 to £1,000.
April 2024 - it will be reduced further to £500.
Changes to the Annual Exempt Amount for Capital Gains Tax.
April 2023 - the Annual Exempt Amount for Capital Gains Tax is to be reduced from £12,300 to £6,000.
April 2024 - it is to be reduced further to £3,000.
Electric cars.
April 2025 - electric cars will cease to be exempt from Vehicle Excise Duty.
You can read the full Autumn Statment report on the government’s website.
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