The Chancellor’s Autumn Statement didn’t have much good news for businesses but did reverse almost every previous policy announced by the previous Prime Minister and Chancellor.
Many of the announcements affect us all, so below we have picked out the main points specifically likely to have an impact on your personal tax and businesses:
- The minimum wage will increase from £9.50 per hour to £10.42 per hour from April 2023 for those 23 and over.
- The point at which you start paying the 45% additional rate of personal tax will fall from £150,000 to £125,140 meaning more people will be dragged into that bracket. This change will not apply in Scotland.
- The rest of the rates and the personal allowance, including national insurance and inheritance tax, are all being frozen for another two years until April 2028. As wages rise with inflation this means more people will be paying tax at a higher rate than before.
- The tax-free allowances on dividends will be reduced from the current £2,000 per year to £1,000 from next year, and then cut again to £500 from April 2024. There was no announcement about any change to the rates dividends will be taxed with.
- The tax-free allowance for capital gains is being reduced from the current £12,600 per year to £6,000 in April 2023, and then down to £3,000 in 2024, so if you are planning on making a capital disposal it will be wiser to do it sooner rather than later.
- A support package of £13.6bn over the next five years will help firms with business rates through a combination of freezes and reliefs.
- Plans for a potential online sales tax have been dropped as it is thought that online retailer warehouses will be hit harder than shops through the business rate changes.
- Electric vehicles will pay road tax from 2025. Cars registered from April 2025 will pay £10 and then move to the standard rate of £165, the rate which will also apply to any electric vehicle registered after April 2017. For now, there has been no mention of the capital allowances or benefit in kind rates on these types of assets being changed.
- Inflation is expected to fall from the current 11.1% to 7.4% next year which does not mean that prices will be falling, just that they will not be rising as quickly.
If you are unsure of how these changes may affect you or your business then just get in touch.