Autumn Budget 2022 - here we go again!
Posted on 19th November 2022
Following further political turbulence and upheaval, another leadership contest and amidst huge economical uncertainty, The Chancellor, now Jeremy Hunt, released his Autumn Budget on Thursday 17 November 2022.
During the announcements he highlighted that “In the face of unprecedented global headwinds, families, pensioners, businesses, teachers, nurses and many others are worried about the future.”
Personal Tax Changes - Income Tax & National Insurance
The basic rate of income tax will remain at 20%
The additional rate of income tax will remain at 45% but the additional rate threshold will reduce from £150,000 to £125,140 from April 2023.
Income tax on dividends were increased by 1.25% from April 2022 - and these rates will now remain. This takes dividends tax rates to 8.75% (basic rate), 33.75% (higher rate) and 39.35%(additional rate)
Personal tax thresholds (personal allowance and basic/higher rate thresholds) are to remain as £12,570 and £50,270 until April 2028.
Dividend allowance is reduced from £2,000 to £1,000 from April 2023 and to £500 from April 2024.
National Insurance rates were previously increased by 1.25% for both employers and employees from April 2022- and this remains. This takes employees rates from 13.25% back to 12.5% and employers rates from 15.05% back to 13.8%.
Business Tax Changes
From April 2023, the planned increase in the corporation tax rate to 25% for companies with over £250,000 in profits will go ahead (previously scrapped in the Mini-Budget). 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 providing a gradual increase in the effective corporation tax rate.
The Annual Investment Allowance (enabling businesses to obtain 100% tax relief on eligible purchases of plant and machinery) was due to be reduced to £200k, but will now remain at £1m.
Stamp Duty
Stamp duty will now only apply on purchases on homes from £250k (was £125k). This only applies to purchases of your main, residential home (not on buy-to-let properties). This will remain in place until 31 March 2025.
IR35
In the Mini-Budget, the IR35 reforms, known as "off-payroll working" in 2017 and 2021, were to be reversed from 6 April 2023 - this is no longer the case, and the IR35 reforms remain in place.
There were no further changes or announcements made regarding IR35 in the Autumn Budget.
Energy Costs
The current Energy Price Guarantee provides support for household and business energy bills until 31 March 2023. Support for households will continue from April 2023 though support will be less generous and based on a higher average usage price cap of £3000 (up from £2,500) per annum, with additional targeted support for vulnerable households.
Further detail about eligibility for support for businesses can be found here. ACCA members have helpfully provided feedback to shape the detailed delivery of the business support scheme and today’s announcement suggested the final details would be published before the end of the year.
Additional Announcements
There are, as always, other announcements, including :-
Electric Vehicles will no longer be exempt from Vehicle Excise Duty from April 2025
Business Rates - there will be a revaluation of business property in April 2023 (current values are based on maret values as at April 2015).
The Capital Gains Tax exemption will reduce from £12,300 to £6,000 from April 2023 and then to £3,000 from April 2024.
Summary
As with all Budgets and government annoucements - we are hearing these headlines today and more detail will be released over the coming days. As ever, the devil is in the detail and we need time to read and digest.
We will be in touch with our clients who may be affected, in the coming weeks.
You can read our more detailed write-up here. If you have any questions, please get in touch!
Written by:
Nicola J Sorrell - Effective Accounting
Founder | Xero Champion | IR35 Expert
Tagged as: Budget & Tax Rates
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