Autumn 2022 Budget

There was a lot to digest after todays budget announcement, so here is a recap:

• Income Tax Threshold – previously, 45p in every £1 earned above £150,000 would be paid in income tax. However, the new budget announcement has seen this threshold drop to £125,140 from April 2023.

• Income tax, National Insurance and Inheritance tax thresholds will remain at their current levels to April 2028.

• National Insurance Secondary Threshold – this will be fixed at £9,100 from April 2023 to April 2028.

• Employment Allowance – the NIC threshold of £5,000 will remain for employers.

• Corporation Tax – the rate of 25% for companies earning above £250,000 in profits will go ahead.

• R&D – tax reliefs from 1 April 2023 will increase from 13% to 20%.

• Capital Gains Tax – the threshold is being dropped from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024.

• Inheritance and Residence Tax – the nil rate bands of £325,000 (IHT) and £175,000 (Residence) will stay until April 2028.

• VAT – registration (£85,000) and de-registration (£83,000) thresholds will remain for an additional two years from April 2024.

• Dividend Allowance – will be reduced from £2,000 to £1,000 from April 2023 and to £500 from April 2024.

• Stamp Duty – increased nil-rate thresholds of £250,000 for all purchases of residential property in England and Northern Ireland. Increased nil-rate threshed for first time buyers to £425,000. This will remain in place until 31 March 2025.

• Diverted Profit Tax – from April 2023, the rate of Diverted Profit Tax will increase from 25% to 31%.

• Energy Profits Levy – from 1 January 2023 the EPL will rise by 10% to 35%.

• Electricity Generator Levy – a new 45% tax will be temporarily levied on returns from low-carbon UK electricity generation, exceeding £10m.

• Business Rates – Business rates multipliers will be frozen in 2023-24. 75% relief for retail, hospitality and leisure sectors in 2023-24 up to £110,000 with additional support provided for small businesses.

• Council Tax – the government is giving authorities in England additional flexibility in setting council tax to 3% per year from April 2023.

• Energy Price Guarantee – will be maintained through the winter. From April 2023 this will rise to £3,000.

• Cost of Living Payment – up to £900 of additional support in 2023-24 for households on benefits, including those receiving tax credits (means tested).

• Electric Vehicles – from April 2025 electric cars, vans and motorcycles will begin to pay Vehicle Excise Duty.

• First Year Allowance for electric vehicle charge points – the government will extend the 100% First Year Allowance to 31 March 2025 for Corporation Tax and 5 April 2025 for Income Tax.

• Company Car Tax Rates – rates will remain until April 2028.

The funding being made available from the Autumn Statement for the NHS, adult social care and schools are as follows:

• NHS – £3.3 billion

• Adult Social Care – £4.7 billion

• Schools – £2.3 billion