The long-awaited Autumn statement was today, 17th of November 2022,  announced by Jeremy Hunt, as the third Chancellor in 2022.

The changes he announced impact both individuals and businesses with the earliest of changes coming into effect from April 2023.

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Personal tax

From April 2023, the additional rate income tax threshold will fall from £150,000 to £125,140. This means the 45% rate of income tax starts from £125,140 for those in England and Northern Ireland. 

Personal allowance, basic rate, and higher rate thresholds have been frozen at current levels until April 2028. They were previously set to be reviewed in April 2026. 

*Scotland sets its own rate of income tax and we are not sure if they will follow suit. Wales also has devolved powers to set rates of income tax but has yet not diverted from what happens in England and Northern Ireland. 

National Insurance

National insurance thresholds maintained until April 2028.

Class 2 national insurance will be rising from £3.15 per week to £3.45 from April 2023.

Dividend tax

From April 2023, the dividend tax allowance will fall from £2,000 to £1,000 and again, from April 2024, it will be reduced to £500. This affects all countries in the United Kingdom.

Capital gains tax

The annual tax-free allowance for capital gains tax will fall from £12,300 to £6,000 from April 2023 and again, from April 2024, it will reduce to £3,000. This applies to the entire United Kingdom.

Company cars (electric cars) and benefit in kind

Company car tax rates will increase by 1% per year for 3 years from April 2025.

Stamp duty

The previous announcement on the stamp duty threshold (doubling from £125,000 to £250,000 and first-time buyers getting £425,000) will remain in place until the 31st of March 2025. 

Employer’s national insurance contribution

The threshold has been frozen until April 2028. 

Employers Allowance 

The £5,000 threshold is also to be maintained although there is no indication for how long.

Value Added Tax (VAT)

The VAT threshold will be maintained at £85,000 until March 2026. 

Business rates

There will be a re-evaluation of business properties from April 2023. 

National living wage

The National Living Wage will increase to £10.42 per hour from April 2023. 

Married Couple’s and Blind Person’s Allowance

The allowances will be going up by 10.1% from 6 April 2023.

Research & Development

From 1 April 2023, the following changes will apply to R&D:

• The small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86%
• The SME credit rate will decrease from 14.5% to 10% and
• R&D expenditure credit rises from 13% to 20%.

Corporation tax, Annual Investment Allowance and IR35

There was no mention of corporation tax, annual Investment Allowance (AIA), and off-payroll working (IR35). This means:

• The planned rise of corporation tax to 25% is going ahead
• The permanent £1 million allowance for annual investment is staying
• The IR35 rules requiring public sector and medium to large-sized private end clients to determine IR35 status and withhold taxes will be maintained