AUTUMN STATEMENT HIGHLIGHTS
As the Private Office Asset Management marketing team makes its way back from our 2-day Business Expo at the London Excel Centre where we had a stand, accompanied by the custom build Harley Davidson commissioned for the Mad Max : Fury Road Hollywood blockbuster film, – where we met some excellent potential new clients and some significant professional introducer firms who we very much look forward to working with, the Chancellor, Jeremy Hunt, has announced a swathe of tax rises, largely by freezing or reducing tax allowances, together with spending cuts targeted at totaling £55 billion over the next five years. Below is a summary of the main points for you.
The tax free personal allowance remains at £12,570 and the higher rate tax threshold is £50,270. These thresholds have been frozen until 2028 and the 45% additional rate tax threshold will be lowered from earnings of £150,000 to £125,140 from 6 April 2023.
The NI earnings thresholds have been frozen until April 2028, but the 1.25% additional Social Care Levy that was scrapped in September has not been reintroduced.
The Inheritance Tax ‘Nil Rate Band’ and additional ‘Residence Nil Rate Band’ will be frozen at £325,000 and £175,000 respectively for a further two years until April 2028.
There has been no significant change to pensions; the headline Annual Allowance remains at £40,000 and the Lifetime Allowance remains frozen at £1,073,100 until April 2026.
The Pensions Triple Lock has been protected and the State Pension will go up by £870 from April 2023, an increase of 10.1% in line with inflation. The government is also reviewing the State Pension age and will publish their review in early 2023. (I think we all know what is coming here!)
Dividend Tax allowance
This is being reduced from £2,000 per year to £1,000 per year from April 2023 and to £500 per year from April 2024.
Capital Gains Tax
The annual Capital Gains Tax exemption will reduce from £12,300 to £6,000 from April 2023 and then to £3,000 from April 2024.
Stamp Duty Land Tax
Stamp Duty changes announced in the previous Budget will remain until March 2025. In England and Northern Ireland the Stamp Duty threshold is £250,000 and the first time buyer threshold is £425,000 on properties under £625,000.
Tax on electric vehicles
From April 2025 electric vehicles will no longer be exempt from Vehicle Excise Duty and Company Car Tax rates will increase, although they will remain lower than tax rates on traditional combustion engine cars.
If you need personal wealth management, our expert team of qualified professionals are here to help.
Windfall Tax on energy companies
Windfall Tax on the profits of oil and gas firms will increase from 25% to 35% until March 2028. There will be a new temporary 45% levy on electricity generators from January 2023 until March 2028. The Chancellor expects this to raise an extra £14 billion.
Properties will be revalued for business rates from April 2023, but there will be significant government support for firms including a new relief scheme. The government says that two thirds of properties will not pay any more in business rates.
The VAT registration threshold will be maintained at £85,000 for a further two year period from April 2024 and the headline rate of VAT remains at 20%.
Living Wage increase
The National Living Wage will rise from £9.50 per hour for over 23’s to £10.42 from April 2023, an increase of 9.7%.
The National Insurance employment allowance of up to £5,000 is frozen until April 2028.
Energy Price Guarantee
While this has been extended for households for a further 12 months from April 2023 (albeit at a less generous level), there has been no further support announced for businesses. The current relief ends in March 2023.