Autumn Statement 2022 – Which taxes have increased?12/11/2022 - 6 minutes read
Autumn Statement 2022 has been delivered by the Chancellor, Jeremy Hunt on Thursday, 17 November.
Autumn Statement 2022 has confirmed significant tax rises and public spending cuts as the government is trying to recover from its disastrous Mini-Budget that was announced in Sep 2022.
Even though the chancellor brought forward his medium-term fiscal plan to 17th October and ruled out any cuts to the basic rate of income tax until economic conditions become favourable, Autumn Statement 2022 has brought further pain to households already struggling with the cost of living crisis.
Dividend Tax – What changes have been announced in Autumn Statement 2022?
The current dividend allowance has been halved to £1,000 in Autumn Statement 2022 effective from April 2023 and reduced further down to £500 effective from April 2024.
The current dividend tax rates are 8.75 per cent for basic rate taxpayers, 33.75 per cent for higher rate taxpayers, and 39.35 per cent for additional rate taxpayers, and more money will fall under this tax as the tax-free rate is reduced.
Income Tax – What changes have been announced in Autumn Statement 2022?
In his Autumn Statement 2022, the chancellor has announced that Income tax thresholds will be frozen for a further two years until 2028, dragging more people into the higher rate 40% tax band. The threshold for the additional tax rate has been reduced from £150,000 to £125,140 from April 2023.
The freeze on income tax thresholds will be a significant revenue raise. The current tax thresholds are £12,570 (basic rate), £50,270 (higher rate), and £150,000 (additional rate)
Capital Gains Tax – What changes have been announced in Autumn Statement 2022?
The Chancellor was eying changes to the headline rate, reliefs, and allowances of CGT and in his statement, he has announced that he will halve the tax-free allowance from £12,300 to just over £6,000 from April 2023, dragging more people into paying it.
The Capital Gains tax-free allowance will be further reduced to £3,000 from April 2024.
Pension contributions relief – What changes have been announced in Autumn Statement 2022?
No changes have been announced today.
Stamp Duty Land Tax cuts – What changes have been announced in Autumn Statement 2022?
On 23 September 2022, the government increased the nilrate threshold of Stamp Duty Land Tax (SDLT) from £125,000 to £250,000 for all purchasers of residential property in England and Northern Ireland and increased the nil-rate threshold paid by first-time buyers from £300,000 to £425,000. The maximum purchase price for which First Time Buyers’ Relief can be claimed was increased from £500,000 to £625,000. This will now be a temporary SDLT reduction. The SDLT cut will remain in place until 31 March 2025 to support the housing market and the hundreds of thousands of jobs and businesses which rely on it. The government will amend the Stamp Duty Land Tax (Reduction) Bill to implement this measure
VED on Electric Vehicles (VED) – What changes have been announced in Autumn Statement 2022?
From April 2025, electric cars, vans and motorcycles will begin to pay VED in the same way as petrol and diesel vehicles. This will ensure that all road users begin to pay a fair tax contribution as the take up of electric vehicles continues
to accelerate. The government will legislate for this measure in Autumn Finance Bill 2022.
• new zero emission cars registered on or after 1 April 2025 will be liable to pay the lowest
first year rate of VED (which applies to vehicles with CO2
emissions 1 to 50g/km) currently
£10 a year. From the second year of registration onwards, they will move to the standard
rate, currently £165 a year
• zero emission cars first registered between 1 April 2017 and 31 March 2025 will also pay
the standard rate
• the Expensive Car Supplement exemption for electric vehicles is due to end in 2025.
New zero emission cars registered on or after 1 April 2025 will therefore be liable for the
expensive car supplement. The Expensive Car Supplement currently applies to cars with a list
price exceeding £40,000 for 5 years
• zero and low emission cars first registered between 1 March 2001 and 30 March 2017
currently in Band A will move to the Band B rate, currently £20 a year
• zero emission vans will move to the rate for petrol and diesel light goods vehicles, currently
£290 a year for most vans
• zero emission motorcycles and tricycles will move to the rate for the smallest engine size,
currently £22 a year
• rates for Alternative Fuel Vehicles and hybrids will also be equalised
Corporation Tax – What changes have been announced in Autumn Statement 2022?
The Chancellor has already confirmed that corporation tax will rise to 25 per cent in April next year.
How can MCL Accountants help?
Contact MCL Accountants on 01702 593 029 if you have any queries on the changes announced in the Autumn Statement 2022 or if you need any assistance with the preparation and submission of your business accounts or self-assessment tax returns to HMRC.