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Autumn Statement 2022: Key highlights

Autumn Statement 2022: What you need to know

Tim Woodgates




Key highlights from the Chancellor's Autumn Statement: 

Economic growth
  • The Office for Budget Responsibility (OBR) says the UK is currently in recession
  • UK inflation rate predicted to be 9.1% this year and 7.4% next year
  • Unemployment expected to rise from 3.6% to 4.9% in 2024
Personal Tax
  • The 45% higher rate of income tax threshold lowered to £125,140 from £150,000
  • Income tax personal allowance and higher rate tax threshold frozen until April 2028
  • Inheritance Tax (IHT) thresholds frozen until April 2028 – the nil-rate band will continue at £325,000 and the residence nil-rate band at £175,000
  • Stamp Duty (SDLT) - the nil-rate threshold will be kept at £250k until 31 March 2025
  • Electric vehicles will need to pay Vehicle Excise Duty (road tax) from April 2025
  • The tax-free allowance for Capital Gains Tax (CGT) will reduce in 2023/24 from £12,300 to £6,000 and to £3,000 in 2024/25
  • The tax-free dividend allowance will be reduced to £1,000 in 2023/24 and to £500 in 2024/25
Company cars
  • The appropriate percentages (used to determine the benefit-in-kind rate) for electric and ultra-low emission cars emitting less than 75g of CO2 per kilometre will increase by 1% per year for each of the three years from April 2025 up to maximum of 5% for electric cars and 21% for ultra-low emission cars in 2027/28.
  • Benefit-in-kind rates for all other vehicle bands will be increased by 1% for 2025-26, up to a maximum appropriate percentage of 37%, and will then be fixed in 2026-27 and 2027-28.
  • From 6 April 2023, car and van fuel benefit charges (the value of the benefit on fuel provided by an employer to an employee for private mileage) will increase in line with the consumer price index.


National Insurance and National Minimum Wage
  • National Insurance thresholds frozen until April 2028
  • A 9.7% increase in the National Living Wage to £10.42 per hour from April 2023 for over 23s
  • The National Minimum Wage increases from April 2023:
    • Increasing the rate for 21-22 year olds by 10.9% to £10.18 an hour;
    • Increasing the rate for 18-20 year olds by 9.7% to £7.49 an hour;
    • Increasing the rate for 16-17 year olds by 9.7% to £5.28 an hour;
    • Increasing the apprentice rate by 9.7% to £5.28 an hour; and
    • Increasing the accommodation offset rate by 4.6% to £9.10 an hour
Business Tax
  • VAT threshold will be maintained at £85,000 until March 2026
  • Corporation Tax will increase to 25% for companies with more than £250,000 in profits as planned in April 2023
  • R&D tax reliefs to be reformed - for expenditure on or after 1 April 2023, the Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20%, the SME additional deduction will decrease from 130% to 86% and the SME credit rate will decrease from 14.5% to 10%.
  • £13.6 billion package of business rates support over the next five years including increasing relief for retail, hospitality and leisure sector from 50% to 75%
Energy
  • The household energy price cap has been extended for one year but is less generous – a typical household will pay £3,000 per year (up from £2,500 currently)
  • Windfall tax on profits of oil and gas firms increased from 25% to 35% and extended until March 2028
  • A new temporary 45% Electricity Generator Levy from 1 January 2023
Business TaxInheritance TaxPayrollPrivate Client TaxR&DSDLTVAT