In this blog, we summarise the main tax changes announced at yesterday’s Autumn Statement.
Personal Taxes
The threshold at which the additional rate (45%) of income tax will apply is to decrease from £150,000 to £125,140 from 6 April 2023.
The dividend allowance will be cut from £2,000 to £1,000 from April 2023 and to £500 from April 2024.
The capital gains tax annual exemption will be cut from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024.
The personal tax allowance, higher rate threshold, main NI threshold and IHT thresholds are to be frozen until April 2028.
Anti-avoidance legislation will apply from 17 November 2022 to prevent advantage being taken by non UK domiciled individuals who seek to take advantage of the share for share exchange rules which enable UK shares to be exchanged for overseas shares without a tax charge and are then eligible for remittance basis.
Stamp Duty Land Tax
The threshold at which SDLT starts to be payable will be increased to £250,000 (from £125,000) as announced in the recent Growth Plan/Mini Budget, will remain in place until 31 March 2025 only.
Business Taxes - Corporation Tax
The Annual Investment Allowance which allows a full cost write-off against business profits for the cost of purchasing qualifying plant and machinery is to be retained at £1m permanently from April 2023.
The First Year Allowance for electric vehicle charge points which allows a full cost write-off against business profits will be extended to April 2025.
There will be a reduction in the enhanced cost deduction for SMEs for qualifying spend on qualifying R&D activities from 130% to 86% and in the repayable tax credit available for the surrender of losses resulting from qualifying R&D from 14.5% to 10% from 1 April 2023.
There will be an increase in the R&D tax credit (RDEC) for qualifying costs of qualifying R&D activities for large companies from 13% to 20% from 1 April 2023.
The government will implement the OECD Pillar 2 rules which seek to deliver a global minimum corporation tax rate of 15% for multinational companies.
Business Taxes - VAT and NIC
The VAT registration threshold to be frozen until March 2026.
The employers National Insurance Contributions threshold and the employment allowance are to be frozen until April 2028.
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Please contact us to find out how the above applies in your circumstances and how you can reduce your tax liabilities and maximise your tax efficiency.
Please note that the above is for general information only and does not constitute financial or tax advice. You should not rely on this information to make or refrain from making any decisions. You should always obtain independent professional advice in respect of your own situation.
