The Chancellor, Jeremy Hunt, who was appointed on 14 October 2022, delivered his first Autumn Statement, which was in stark contrast to Kwasi Kwarteng’s tax-cutting ‘mini-budget’ delivered less than two months ago.
In his statement, Mr Hunt took the opportunity to also confirm that the UK is now in recession.
Our key points of the Autumn Statement 2022 are:
- * Additional rate threshold changed to £125,140
- * Personal allowance threshold to be frozen until 2028
- * Capital Gains Tax allowance to be cut to £6,000 from April 2023.
- * Dividend allowance will be cut to £1,000 from April 2023.
- * Electric vehicles no longer be exempt from Vehicle Excise Duty from April 2025.
- * Stamp Duty cuts will remain in place until March 2025.
- * Home energy bills assistance will be extended, but it will be less than the current levels.
- * Employer’s National Insurance threshold is frozen until April 2028
- * R&D relief cut to 86% and the credit rate to 10%
- * The National Living Wage will be increased to £10.42 from April 23
- * Pensions will rise to 10.1%
- * Windfall tax to raise from 25% to 35%
Additional Rate Threshold
The income tax additional rate threshold will be lowered from £150,000 to £125,140 from 6 April 2023. For non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland. For savings and dividend income will apply UK-wide
Personal Allowance Threshold
The income tax for Personal Allowance and higher rate thresholds are already fixed at their current levels until April 2026 and will now be maintained for an additional two years until April 2028.
Capital Gains Tax
Capital Gains Tax Annual Exempt Amount from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024. It will then be cut to £3,000 from April 2024.
Dividend Allowance from £2,000 to £1,000 from April 2023 and to £500 from April 2024. It will then be cut again from £1,000 to £500 in April 2024.
From April 2025, electric cars, vans and motorcycles will begin to pay Vehicle Excise Duty in the same way as petrol and diesel vehicles
On 23 September 2022, the government increased the nil-rate threshold of Stamp Duty Land Tax (SDLT) from £125,000 to £250,000 for all purchasers of residential property in England and Northern Ireland and increased the nil-rate threshold paid by first-time buyers from £300,000 to £425,000. The maximum purchase price for which First Time Buyers’ Relief can be claimed was increased from £500,000 to £625,000. This will now be a
temporary SDLT reduction. The SDLT cut will remain in place until 31 March 2025.
Home Energy Bills
The Energy Price Guarantee will be maintained the until April 23, limiting typical energy bills to £2,500 per year. From April 2023, the Energy Price Guarantee will rise to £3,000.
Employer’s National Insurance
National Insurance contributions (NICs), Upper Earnings Limit (UEL) and Upper Profits Limit (UPL) are already fixed at their current levels until April 2026 and will now be maintained for an additional two years until April 2028.
Research and Development Relief
For expenditure on or after 1 April 2023, the Research and Development Expenditure Credit rate will increase from 13% to 20%, the small and medium-sized enterprises’ additional deduction will decrease from 130% to 86%, and the SME credit rate will decrease from 14.5% to 10%.
National Living Wage
The National Living Wage will increase for individuals aged 23 and over by 9.7% from £9.50 to £10.42 an hour from 1 April 2023. Increases for other ranges are as follows:
• 21-22 year olds by 10.9% to £10.18 an hour
• 18-20 year olds by 9.7% to £7.49 an hour
• 16-17 year olds by 9.7% to £5.28 an hour
• Apprentice rate by 9.7% to £5.28 an hour
• Accommodation offset rate by 4.6% to £9.10 an hour
The State Pension will be uprated by Pensions will rise to 10.1%, in line with September’s inflation with the commitment to the Triple Lock.
A windfall tax on the profits of oil and gas firms will increase from 25% to 35% and be extended until March 2028.