 Photo by Kelly Sikkema on Unsplash | The Chancellor delivered his Autumn Statement this week. Many of the measures announced were given much advance coverage and in one or two cases were not as tight as many had predicted. In this latest blog I've covered the major points of interest for my followers and readers to make sure you get the information you might need. It's in manageable portions and in plain language to make things easier to follow |
Autumn Statement 2022
So what are the main points in bullets?
- Freezing tax, VAT and National Insurance thresholds and reducing the point at which people pay additional rate tax
- Reducing the threshold at which people pay dividend tax to £1,000
- Reducing the Capital Gains Tax Exempt Amount
- Quarterly Tax Returns for Sole Traders and Landlords (Making Tax Digital) were not specifically mentioned so you need to start preparing!
Corporation tax and capital allowances
The planned increase in corporation tax to 25% will go ahead as planned and smaller companies will continue 19% although there are some very complicated rules around owning multiple companies and accessing the lower rate so less is certainly more when it comes to controlling companies!
The annual investment allowance will remain at £1m, rather than falling to £200,000, which brings some certainty to business making plant and machinery still an attractive proposition.
The annual investment allowance will remain at £1m, rather than falling to £200,000, which brings some certainty to business making plant and machinery still an attractive proposition.
Electric Cars
 | The chancellor accepted the need not to disincentivise electric cars however some changes were made to future taxation:
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VAT Threshold
The VAT threshold will remain at £85,000 – remember this is a rolling 12 month period not a calendar or business year
Personal tax
Below are the key ‘take aways’ from the budget:
- The personal allowance is frozen at £12,570 until 2028;
- In contradiction to the September budget the additional (45%) tax rate will now be payable on incomes of more than £125,140;
- A reduction in the dividend allowance from £2,000 to £1,000 from April 2023 and then £500 from April 2024 – this will affect the vast majority of company owners
- Capital Gains Tax: a reduction in the annual exempt amount from £12,300 to £6,000 from April 2023 then £3,000 from April 2024 – this is much kinder than many commentators were predicting
National Insurance and Dividend Tax
As previously reported, national insurance contributions will be cut by 1.25 percentage points from November this year. The health and social care levy, due to come in from April 2023, was also cancelled in September.
Although originally historically linked to National Insurance, dividend tax will not be reduced and remain at 8.75% for basic rate tax paying Company Directors. It is however worth remembering that the point where individuals pay National Insurance is significantly higher than it was this time last year and is now aligned with the Personal Allowance
Although originally historically linked to National Insurance, dividend tax will not be reduced and remain at 8.75% for basic rate tax paying Company Directors. It is however worth remembering that the point where individuals pay National Insurance is significantly higher than it was this time last year and is now aligned with the Personal Allowance
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