Autumn budget 2022
Corporation Tax
The rise of corporation tax has been re-established from April 2023, if your profit is greater than £250,000 then the rate will increase from 19% to 25%. Businesses with profits less than £50,000 will remain at the standard 19%. All businesses with profits in between these amounts will pay a relative percentage based on a table which has not yet been released.
VAT Threshold
The VAT threshold will not increase from an income of £85,000, this may lead to more small businesses reaching the limit. This will stay in place until March 2026.
Research & Development Tax
A reduction of relief of Research and Development tax for small to medium sized enterprises from 150% to 86% has been implemented. The tax credit rate has also been lowered from 14.5% to 10% of your surrenderable loss. An increase in Research and Development Expenditure Credit from 13% to 20% will also take place for larger companies. These changes will take place from April 2023.
Stamp Duty
Cuts to stamp duty land tax which were announced in the mini budget have been made temporary until the 31st March 2025.
Wages & Payroll
Income Tax
The 45% threshold has been reinstated, now for incomes over £125,140 starting in April 2023. All other brackets have however been frozen until April 2028.
National Insurance
NIC thresholds and Class 1 rates have also been frozen to April 2028. However, Class 2 will rise to £3.45 and Class 3 will rise to £17.45 per week from April 2023.
Employers NI
The secondary threshold for employers NIC is frozen at £9100 until April 2028, meaning employment costs will rise in line with wages.
Minimum Wages
The national minimum wages are also increasing from April 2023 as follows:
National Living Wage (Over 23) - £9.50 rising to £10.42
Between 21 and 22 - £9.18 rising to £10.19
Between 18 and 20 - £6.83 rising to £7.49
Apprentices and between 16 and 17 - £4.81 rising to £5.28
Employment Allowance
The employment allowance remains at £5000 for 2023/24, protecting around 40% of businesses from paying any NICs, this is automatically deducted from your P30 calculation.
Dividends Allowance
Director’s dividends allowance is decreasing significantly in the next two years, starting with a drop from £2000 to £1000 in April 2023, followed by another reduction in 2024 to £500. It may be you want to have a chat with us about how this will effect your personal tax if you are a Company Director.
Capital Gains Tax
The exempt amount from Capital Gains Tax is also having a large reduction over the next 2 years. Starting with a drop from £12,300 to £6,000 in April 2023, then dropping again to £3,000 in April 2024. This will reduce attractiveness for investment due to the extra taxable amount.
Miscellaneous Information
Vehicle Excise Duty
The duty for electric vehicles has been extended from April 2025 which will result in higher costs if providing these cars.
Energy Support
The energy price guarantee to continue for another year at a higher rate of £3,000 for the average household. However, the energy bill relief scheme for non-domestic properties is under review and will show less support but will be more targeted.
Business Rates
Many business rates are decreasing, as well as a £13.6 billion rates relief fund will be introduced from April 2023, targeting help at small businesses and the retail, hospitality and leisure sectors.
Annual Investment Allowance
The 130% relief of capital expenditure ends at the end of March 2025, however £1 million of annual investment allowance has been made permanent.
Investment Zones
An investment zone will be an area with significant tax cuts in order to promote investment and economic growth. The first decisions about these zones will be announced before the Spring Budget.