Taxation and Wages
- National Living Wage for employees aged over 23 to increase from £9.50 to £10.42 an hour from next April.
- National Insurance contributions secondary threshold will be fixed at £9,100 from April 2023 until April 2028. The Employment Allowance will mean the smallest employers will not be affected.
- State pension payments and means-tested and disability benefits to increase by 10.1%, in line with inflation.
- 45% additional rate of income tax will be paid on earnings over £125,140, instead of £150,000
Dividends Tax Free Allowances
- Dividend Allowance will be reduced from £2,000 to £1,000 from April 2023, and to £500 from April 2024
Capital Gains Allowances
- Capital Gains Tax Annual Exempt Amount will reduce from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024. The government will legislate for this measure in Autumn Finance Bill 2022
Frozen till Further Years
- Income tax personal allowance and higher rate thresholds frozen for further two years, until April 2028
- Main National Insurance and inheritance tax thresholds also frozen for further two years, until April 2028
- Inheritance Tax (IHT) nil-rate band and residence nil-rate bands will be fixed at their current rates until April 2028
- VAT registration and deregistration thresholds will be maintained at the current levels of £85,000 for an additional two years from 1 April 2024
Stamp Duty Land Tax (SDLT)
- SDLT cuts – on 23 September 2022, the government increased the nil-rate thresholds of SDLT from £125k to £250k for all purchasers of residential property in England and Northern Ireland and increased the nil-rate threshold for first time buyers from £300k to £425k. The cut will remain in place until 31 March 2025. This will be legislated through the SDLT (Reduction) Bill.
- From April 2025, electric cars, vans and motorcycles will begin to pay Vehicle Excise Duty (VED), in the same way as petrol and diesel vehicles.Until now, electric vehicles have been exempt, but the annual VED charge for cars will now be £10 in the first year, then £165 from the second year of registration onwards.
- Company Car Tax (CCT) Rates – the government is setting rates for CCT until April 2028 to provide long term certainty for taxpayers and industry in Autumn Finance Bill 2022
- First Year Allowance for electric vehicle charge points – the government will extend the 100% First Year Allowance for electric vehicle charge points to 31 March 2025 for Corporation Tax and 5 April 2025 for Income Tax
- Household Energy Price Cap extended for one year beyond April 23, bills will be capped at £3,000 instead of £2,500.
- Households on means-tested benefits will get £900 support payment next year.
- £300 payments to pensioner households, and £150 for individuals on disability benefit.
- Windfall tax on profits of oil and gas firms increased from 25% to 35% and extended until March 2028.
- New 45% tax on companies that generate electricity, to apply from January.
Research & Development
- Reforms to R&D tax reliefs – for expenditure on or after 1 April 2023, the Research & Development Expenditure Credit rate will increase from 13% to 20%, the SME additional deduction will decrease from 130% to 86%, and the SME credit rate will decrease from 14.5% to 10%.The government is continuing the review of R&D tax reliefs that was launched at Budget 2021 and will consult on the design of a single schemes.
Economy & Public Finances
- The Office for Budget Responsibility judges UK to be in recession, meaning the economy has slowed for two quarters in a row.
- It predicts growth for this year overall of 4.2%, but size of the economy will shrink by 1.4% in 2023.
- Growth of 1.3%, 2.6%, and 2.7% predicted for 2024, 2025 and 2026.
- UK’s inflation rate predicted to be 9.1% this year and 7.4% next year.
- Unemployment expected to rise from 3.6% to 4.9% in 2024.
- Government will give itself five years to hit debt and spending targets, instead of three years currently.
Earlier Announced Maintained
SEIS & CSOP
Seed Enterprise Investment Scheme and Company Share Option Plan.
As a reminder:
- From April 2023, you’ll be able to receive a maximum of £250,000 through SEIS investment, up from £150,000.
- The value of options that can be granted through Company Share Options Plans will be increased to £60,000 and share class restrictions will be removed.
Annual Investment Allowance
- The £1m allowance rate will be maintained from 1 April 2023.
- From 6 November 2022 the main and additional rates of Class 1 employee NICs will be reduced by 1.25 percentage points to 12% and 2%. Class 1 employer NICs will also be reduced by 1.25 percentage points to 13.8%