Business
Budget
Today, we heard Chancellor Jeremy Hunt announce the contents of his Autumn Statement. Within this statement are a combination of tax rises and spending cuts. So, we wanted to share some of the key take-aways👇
The Office for Budget Responsibility (OBR) confirms that the UK is in recession after the economy shrinks for two quarters in a row. The OBR forecasts gross domestic product (GDP) to shrink by 1.4% next year and then rise to 1.3% in 2024, 2.6% in 2025 and 2.7% in 2026.
The rate of inflation is predicted to be 9.1% this year, decreasing to 7.4% the following year.
Unemployment is also forecasted to rise from the current figure of 3.6% to 4.9% in 2024.
The employer national insurance threshold of £9,100 will be frozen until 2028. However, the employment allowance will remain at £5,000.
The VAT registration threshold will remain at £85,000 until 2026.
R&D: For expenditure on or after 1st April 2023 the Research and Development Expenditure Credit (RDEC) will increase from 13% to 20%. For small and medium-sized enterprises, however, the additional deduction rate will be reduced from 130% to 86% and the SME credit rate will decrease from 14.5% to 10%.
Business rates multipliers will be frozen in 2023-24 with relief for retail, hospitality and leisure sections being extended. This support is expected to be worth £13.6b over 5 years.
Corporation tax increases will go ahead in April 2023.
The additional rate threshold (taxed at 45%) will be reduced from £150,000 to £125,140 - meaning taxpayers affected will pay an extra £1,200 in tax.
The income tax and personal tax-free allowance will stay frozen at £12,570 until 2028. The government is also fixing other personal tax thresholds within income tax, NICs and Inheritance Tax for an additional 2 years, until April 2028.
The dividend tax-free allowance will be cut from £2,000 to £1000 in April 2023 and further reduced to £500 in April 2024.
Capital gains tax-free annual allowance - which is currently £12,300 - will be reduced to £6,000 in April 23 and then £3,000 from April 24.
The stamp duty cuts announced in the mini-budget will remain in place only until 31st March 2025.
The legally-enforceable minimum wage for people aged over 23 is set to increase from £9.50 to £10.42.
Company car tax rates for electric and ultra-low emission cars emitting less than 75g of CO2 per km will increase by 1% in 2025-26; a further 1% in 2026-27 and a further 1% in 2027-28 up to a maximum percentage of 5% for electric cars and 21% for ultra-low emission cars.
The pension triple lock will be kept, with the State Pension increasing in line with inflation from April 2023.
Inheritance tax nil rate bands have been frozen until 2027.
The energy price cap will be extended from April 2023 for a year, however, the average bill will be capped at £3,000 instead of the current £2,500 cap.
The windfall tax on profits for oil & gas companies increased from 25% to 35% until March 2028.
A new temporary tax of 45% on companies that generate electricity to come into play from January 2023.
One-off payments of £900 to households on mean-tested benefits, £300 to pensioner households and £150 for individuals on disability benefits.
Social housing rents are to be capped at 7% to avoid rent increases of up to 11%.
Benefits will rise with September’s inflation rate of 10.1% with the benefit cap increasing with inflation next year.
Â
We know the new Autumn Statement is a lot to wrap your head around, so if you have any questions or want to find out more about any of the above topics don’t hesitate to get in touch with us, we’re happy to help! 👇
