Chancellor’s Autumn Statement

Yesterday the Chancellor of the Exchequer, the Rt Hon Jeremy Hunt MP, made his Autumn Statement 2022 speech. The chancellor set out the government’s plan “to put public spending on a sustainable footing and get debt falling, while protecting vital public services and prioritising the needs of the most vulnerable.” Full details are set out in the Autumn Statement document on GOV.UK, alongside other relevant documentation from the Office for Budget Responsibilty (OBR) and Treasury. A focused Autumn Finance Bill will be introduced next week to legislate for some of the measures announced. 

Key tax announcements include, a number of threshold and allowances measures, energy levy changes, changes to R&D tax reliefs, and a package of reforms to business rates.

Threshold freezes and personal tax allowance measures:

National Insurance contributions thresholds will be fixed at their current rates until April 2028. The government will legislate for the measure through secondary legislation in early 2023.

The National Insurance contributions secondary threshold will be fixed at £9,100 from April 2023 until April 2028. The Employment Allowance will mean the smallest employers will not be affected.

Energy Levies:

Energy Profits Levy (EPL) – from 1 January 2023, the EPL rate will rise by 10 percentage points to 35% and will be extended to 31 March 2028. The investment allowance will be reduced to 29% for all investment expenditure (other than decarbonisation expenditure) broadly maintaining its existing cash value. Decarbonisation expenditure will continue to qualify for the current investment allowance rate of 80%. The government will legislate for these measures in Autumn Finance Bill 2022, except the changes related to decarbonisation expenditure which will be legislated for in Spring Finance Bill 2023.

Corporate Tax changes:

Reforms to R&D tax reliefs – for expenditure on or after 1 April 2023, the Research & Development Expenditure Credit rate will increase from 13% to 20%, the Small and Medium Enterprise (SME) additional deduction will decrease from 130% to 86%, and the SME credit rate will decrease from 14.5% to 10%. The government is continuing the review of R&D tax reliefs that was launched at Budget 2021 and will consult on the design of a single scheme.

Other measures include:

  • Company Car Tax (CCT) Rates – the government is setting rates for CCT until April 2028 to provide long term certainty for taxpayers and industry in Autumn Finance Bill 2022
  • Van Benefit Charge and Car & Van Fuel Benefit Charges – from 6 April 2023, Car and Van Fuel Benefit Charges and Van Benefit Charge will increase in line with the September 2022 Consumer Price Inflation (CPI) rate.
  • a substantial package of reforms to business rates has also been announced. Further details are set out on GOV.UK