Autumn Statement 2022: Key Tax Change Highlights

By Kate | November 17, 2022

This morning (Thursday 17^th November), Chancellor Hunt unveiled his 2022 Autumn Statement, featuring tax rises and spending cuts worth billions, in order to tackle the cost-of-living crisis, and rebuild the UK economy.

The changes include freezing allowances and thresholds that will pull millions into paying tax for the first time, hundreds of thousands into higher tax bands, and a jump in corporation tax for larger businesses. Biggest changes seen are for those earning more than £125,140 annually, investors and pensioners living off dividends, and landlords selling properties with a capital gain.

Continue reading for a summary of the main tax changes from Thursday’s announcement – and contact us today for further advice.

Table of Contents

Personal Taxes

National Insurance thresholds: Employee NI threshold frozen at £12,570 until April 2028
Income Tax thresholds: Basic and Higher Rate Income Tax thresholds frozen until April 2028
- Basic rate (20%) – £12,571 to £50,270
- Higher rate (40%) – £50,271 to £125,139
Additional Rate Income Tax: But Additional Rate Income Tax (45%) to be paid above the lower threshold of £125,140 (£150,000 previously) from April 2023
Inheritance Tax: Inheritance Tax thresholds frozen until April 2028
- Nil Rate Band – £325,000
- Residence Nil Rate Band – £175,000
Dividend allowances: Dividend allowances to be cut from £2,000 to £1,000 next year, and from £1,000 to £500 in April 2024
Capital Gains Tax allowance: Annual exempt allowance for Capital Gains Tax to reduce from £12,300 to £6,000 next year, and from £6,000 to £3,000 in April 2024
Stamp Duty Land Tax (SDLT): The recent SDLT cut for properties of £250,000 (£400,000 for first-time buyers) to return to £125,000 (£300,000 for first-time buyers) in March 2025
Vehicle Excise Duty – Electric cars, vans and motorcycles no longer exempt from Vehicle Excise Duty from April 2025

Business Taxes

Corporation Tax: Corporation Tax increase to remain from next April – an increase from 19% to 25% for larger businesses
Business rates: £14bn cut on business rates from April 2023 and a revaluation
VAT: VAT threshold frozen at £85,000 until March 2026
R&D: R&D relief for SMEs reduced from 130% to 86%, and credit rate to 10%
Windfall taxes: Windfall taxes on oil and gas firm profits increased from 25% to 35%, and new temporary 45% levy on electricity producers from January 2023

Wages

National Living Wage: National living wage for those aged 23+ to go up from £9.50/hr to £10.42/hr in April 2023, an increase of 9.7%
Employment allowance: Employment allowance to be retained at new, higher level of £5,000
Employer National Insurance: Employer NICs threshold frozen until April 2028

Energy

Energy price guarantee: Domestic energy price guarantee to be kept for another 12 months at an average of £3,000 per household, up from £2,500 currently

How Will the Changes Impact You?

If you’re unsure how the tax changes from the Autumn Statement 2022 may affect you or your business, our tax team is here to help. Get in touch through our contact form, call 01743 562430, or email hello@mercianaccountants.co.uk today.