Autumn Statement – Headline Changes

Corporation Tax

• From April 2023, the planned increase in the corporation tax rate to 25% for companies with over £250,000 in profits will go ahead.
• Small companies with profits up to £50,000 will continue to pay corporation tax at 19%.
• Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief.

Income Tax

• The income tax additional rate threshold will reduce from £150,000 to £125,140 from April 2023.
• Personal tax thresholds – ie personal allowance, basic and higher rate thresholds for income tax – are maintained until April 2028 at a current level of £12,570 and £50,270.
• Basic rate of income tax will be maintained at 20%. This was previously announced to be reduced to 19%, which will not go ahead from 2023.

National Insurance

• The national insurance thresholds for all classes will be maintained until April 2028 at the current level.
• The employment allowance is set to the current level of £5,000.
• The temporary 1.25% increase from 6 April 2022 in national insurance rates has been abandoned from 6 November 2022. The Health and Social Care Levy is no longer going ahead. The introduction of a separate Health and Social Care Levy tax in April 2023 has been cancelled too.

Dividend allowance

• Dividend allowance is reduced from £2,000 to £1,000 from April 2023 and to £500 from April 2024.

Capital gains tax:

• The annual exemption amount for capital gains tax for individuals will change from £12,300 to £6,000 from April 2023, then £3,000 from April 2024.

VAT

• The VAT registration and deregistration thresholds at £85,000 will not change for a further period of two years from 1 April 2024.

National Living Wage

• From 1 April 2023, the government will increase the National Living Wage (NLW) by 9.7% to £10.42 an hour, for those aged 23 and over.

Inheritance tax

• Inheritance tax nil-rate band and residence nil-rate band – thresholds are maintained at the current level until April 2028.

SDLT

• Stamp Duty Land Tax (SDLT) cuts for England and Northern Ireland will remain in place until 31 March 2025. On 23 September 2022, the government increased the nil-rate threshold of 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 which will remain in place only until 31 March 2025.

Annual Tax on Enveloped Dwellings

• The annual chargeable amounts for the ATED will be uplifted by the September CPI figure of 10.1% for the 2023-24 ATED charging period.

Annual Investment Allowances

• Annual Investment Allowance has been confirmed at a permanent rate of £1 million from 1 April 2023.

Car tax

• The chancellor has announced electric vehicles will no longer be exempt from Vehicle Excise Duty from April 2025
• Company car taxes are under review and are going to be set up until April 2028:

– Electric and ultra-low emission cars emitting less than 75g of CO2 per kilometer will increase by 1 percentage point in 2025-26; a further 1% in 2026-27 and a further 1% in 2027-28 up to a maximum appropriate percentage of 5% for electric cars and 21% for ultra-low emission cars.

– Rates for all other vehicles bands will be increased by 1 percentage point for 2025-26 up to a maximum appropriate percentage of 37% and will then be fixed in 2026-27 and 2027-28.