Autumn Budget Summary 2022

Kathryn

Jeremy Hunt has presented his first budget to the house today.

Most announcements were broadly as expected, although the scale of the reductions to the dividend threshold and capital gains allowance did come as a surprise.

Individuals

  • Personal allowance to remain at £12,570 until April 2028 (previously 2026).
  • Higher rate threshold to remain at £50,270 until April 2028 (previously 2026).
  • Inheritance tax nil-rate bands to remain frozen until April 2028 (previously 2026).
  • Top rate threshold at which income is taxed at 45% falls from £150,000 to £125,140 from April 2023.
  • Capital gains tax annual allowance to fall from £12,300 to £6,000 from April 2023 and then £3,000 from April 2024.
  • No changes announced to capital gains tax rates or Entrepreneurs’ Relief.
  • No changes to savings starting rate allowance (£5,000) or personal savings allowance (£500 or £1,000 for lower and higher rate taxpayers).
  • Employee National Insurance payment threshold to remain in line with the personal allowance until April 2028.
  • A review of state pension age, particularly whether the scheduled timetable of increases over the next 25 years remains appropriate, will be published in early 2023
  • Minimum wage to increase from £9.50 to £10.42 per hour from April 2023 for those aged 23 and over.

Businesses & self-employed

  • The class 4 National Insurance Threshold is expected to increase to £12,570 from April 2023 with a restoration of the 9% rate (currently 9.73% over £11,908).
  • Class 2 National Insurance will increase to £3.45 per week from April 2023.
  • Employer National Insurance payment threshold to be fixed at £9,100 from April 2023 to April 2028.
  • Employment allowance to remain at £5,000.
  • The VAT registration threshold remains fixed at £85,000 until April 2026.
  • Business rates to be updated from April 2023 to reflect changes in property values with increases for the smallest businesses being capped at £600 per year.
  • Business rates relief for eligible retail, hospitality and leisure to be increased from 50% to 75% in April 2023.
  • R&D relief rate changes to be introduced.

Companies & shareholders

  • The tax-free dividend threshold to fall from £2,000 to £1,000 from April 2023 and then £500 from April 2024.
  • Confirmation that the Corporation Tax Main Rate will be increased to 25% from 1 April 2023 for profits over £250,000.
  • Confirmation that the Corporation Tax Small Companies Rate introduced at 19% from April 2023 for profits under £50,000.
  • Confirmation that Marginal rates of corporation tax will apply to profits between £50,000 and £250,000 from April 2023.
  • Benefit in kind charges for company cars and vans to increase.
  • Following consultation there will be no Online Sales Tax.
  • R&D relief rate changes to be introduced.

    Property

    • Previously announced Stamp Duty cuts to remain in place until 31 March 2025.
    • Social rent increases to be capped at 7%.
    • ATED charges will increase by 10.1% from April 2023.

    Other announcements

    • Minimum wage to increase to £10.42 per hour from April 2023 for those aged 23 and over.
    • Electric cars, vans and motorcycles will be subject to Vehicle Excise Duty from April 2025.
    • Windfall taxes for energy companies to raise £14 billion next year.
    • Benefit payments and the benefits cap to increase by 10.1% from April 2023.
    • Pensions triple lock to remain in place.
    • Energy cap to increase to £3,000 in April 2023.
    • A comprehensive NHS workforce plan to be published next year.
    • There will be a (below inflation) increase in core funding for schools.
    • Overseas aid budget will remain at around 0.5% of GDP – below the 0.7% target.
    • Defence budget to remain at 2% of GDP.

    If you would like to discuss any of the points raised in this budget or have any questions, please do not hesitate to contact me on 07980 308548 or at kathryn@greenwoodtax.co.uk. Find me on Facebook and on LinkedIn for more updates.

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