Autumn Statement 2022 – Key tax changes

Posted on 23rd November 2022 by Dominique Childs


The Chancellor, Jeremy Hunt, presented his first Autumn Statement on 17 November 2022 against a challenging UK and global economic backdrop. He set out three priorities for the Government, namely stability, growth and public services, and outlined the steps to the achieve these, including a number of tax measures designed to contribute to the repair of public finances.

Key dates

The personal allowance and basic rate band, previously frozen until 6 April 2026, will now remain at their current levels for a further two years until 6 April 2028.  The additional rate threshold will fall to £125,140 from 6 April 2023.
The primary and secondary National Insurance thresholds are also frozen until 6 April 2028.
The capital gains tax annual exempt amount and dividend allowance will be reduced from 6 April 2023 and also further reduced from 6 April 2024 and 6 April 2025. The inheritance tax threshold, previously frozen at £325,000 until 6 April 2026, will remain at this level until 6 April 2028.
This note explains the tax measures announced in the Autumn Statement.

Income tax

The Chancellor had hinted at eye watering tax rises’. In the event, these predominantly took the form of reductions to or further freezing of allowances and thresholds rather than increases in the rates of tax. Consequently, the basic rate of tax will remain at 20%, the higher rate at 40% and the additional rate at 45%.
The personal allowance had already been frozen at its current level of £12,570 until 6 April 2026. It will now remain at this level for a further two years until 6 April 2028. Likewise, the basic rate band will now remain at its current level of £37,700 until 6 April 2028 rather than 6 April 2026 as previously announced. Consequently, the level at which an individual with the standard personal allowance will start to pay higher rate tax remains at £50,270 until 6 April 2028.
Although the additional rate of tax is to remain in place at its current level of 45%, from 6 April 2023, the additional rate threshold will fall from £150,000 to £125,140. This is the point at which the personal allowance (which is reduced by £1 for every £2 by which adjusted net income exceeds £100,000) is fully abated. The reduction in the additional rate threshold will mean that anyone with taxable income in excess of £150,000 will pay an additional £1,243 in tax.

Although the income tax rates are unchanged, the freezing of the personal allowance and basic rate band and the reduction in the additional rate threshold will push more people into high tax bands as wages rise.

National Insurance contributions

The Class 1 National Insurance primary threshold was aligned with the personal allowance from 6 July 2022. The alignment will remain and, like the personal allowance, the National Insurance primary threshold will remain at £12,570 a year (£242 per week, £1,048 per month) until 6 April 2028. The secondary Class 1 threshold is also frozen at its current level (£175 per week, £758 per month, £9,100 per year) until 6 April 2028. However, the employment allowance will remain at £5,000.

Dividend allowance

The dividend tax rates were increased by 1.25% from 6 April 2022 as part of a package of measures to fund health and social care costs. Despite the cancellation of the planned Health and Social Care Levy and the reversal of the associated National Insurance increases, the dividend tax rate increases were not reversed and the dividend tax rates remain at 8.75% where dividends fall within the basic rate band, 33.75% where dividends fall within the higher rate band and at 39.35% where dividends fall within the additional rate band.
For those receiving income in the form of dividends, the Autumn Statement contained more bad news. The dividend allowance, currently set at £2,000, is to fall to £1,000 from 6 April 2023 and to £500 from 6 April 2024. This will affect you if you have a personal or family company and extract profits in the form of dividends, and also if you receive significant investment income in the form of dividends from shares.

Capital Gains Tax

There were no changes to the rates of capital gains tax; however, the amount of gains that an individual can realise before paying capital gains tax is to be seriously curtailed. The capital gains tax annual exempt amount is currently £12,300. The plan had been to freeze it at this level until 6 April 2026. However, instead it will be cut to £6,000 for 2023/24 and then further reduced to £3,000 from 6 April 2025.
If you plan to sell assets that will realise a gain, consideration should be given to the timing of the disposal to maximise the gain that will be sheltered by the annual exempt amount.
The Government are also to introduce legislation in the 2023 Finance Bill to deem shares and securities in a non-UK company received in exchange for shares and securities in a UK close company to be located in the UK for capital gains tax purposes. The measure will only apply where an individual owns at least 5% of the UK close company.

Inheritance tax

The inheritance tax nil rate will now remain at £325,000 for a further two years until 6 April 2028. The residence nil rate band will also remain frozen at £175,000 until 6 April 2028.

Corporation tax

The corporation tax rate changes previously announced will go ahead, meaning a company with profits of more than £250,000 will pay corporation tax at a rate of 25% from 1 April 2023. A small profits rate of 19% will apply to a company with profits of £50,000 or less. Between these limits, the company will pay an effective rate of between 19% and 25%.


The VAT registration threshold is to remain at its current level of £85,000 until 31 March 2026.

Electric cars

From 1 April 2025, electric cars will no longer be exempt from vehicle excise duty.
While tax rates for electric company cars will remain lower than those for petrol and diesel cars, as more than 50% of new cars are expected to be electric by 2025, the appropriate percentage for electric cars (currently 2%) will increase by 1% a year for three years from 2025.

Stamp Duty Land Tax

The increase in the residential and first-time buyer SDLT thresholds that took effect from 23 September 2022 will now come to an end on 31 March 2025.

R & D tax relief

To counter tax avoidance, reforms to the R & D tax relief for SMEs were announced. The deduction rate for the SME scheme is to be cut to 86% (from 130%) and the credit rate is to be reduced to 10% (from 14.5%). However, the separate R & D expenditure credit is to be increased from 13% to 20%.

Business rates

The revaluation of business properties from April 2023 will go ahead. However, transitional relief will be available for a three-year period to support businesses facing increased bills as a result of the revaluation.

National Living and Minimum Wages

The National Living Wage and National Minimum wage are increased by 9.7% from 1 April 2023. As a result, the National Living Wage for workers age 23 and above will rise to £10.42 per hour. From the same date, the National Minimum Wage for workers age 21 and 22, increases to £10.18 per hour, the rate for workers aged 18 to 20 increases to £7.49 per hour and the rate for workers aged 16 and 17 to £5.28 per hour. The apprentice rate is increased to £5.28 per hour and the accommodation offset, which applies where accommodation is provided, will rise to £9.10 per day.

Windfall taxes

The Energy Profits levy is to be increased from 1 January 2023 to March 2028 from 25% to 35%.
From 1 January 2023, a temporary 45% levy will be introduced for windfall profits from low carbon energy generation.

Audio-visual tax reliefs

The Government are consulting on reforms to the tax-reliefs for audio-visual industries. The consultation runs until 9 February 2023.

We can help

This latest government announcement, along with high inflation, higher interest rates, increasing energy prices and shortages of people & materials mean that now is the time to ensure you have a tight grip on your numbers and a clear financial plan. 
Please call if you need more information on any of the announcements made, or to learn more about how Steven Burton & Co can help you to better understand your business finances.

This material has been prepared for informational guidance purposes only.  Whilst every effort has been made to ensure the contents are accurate, information contained may not be comprehensive.  Furthermore it is not intended to provide, and should not be relied on for, tax or accounting advice.  Steven Burton & Co Limited can not accept any liability for any errors or omission or for any person acting on or refraining from acting on the information provided.

Dominique Childs

Dominique’s exceptional service ethic stems from her deep commitment to our clients and their businesses. Solving any issues that may arise in a professional and approachable manner, Dominique’s knowledge of accountancy and experience in client facing roles facilitates our client support.

Learn More

Built on cloud accountancy:

Get in touch

Our friendly customer service team are on hand to help with any queries you may have.

    We'd like to occasionally send you communications via email to keep you up to date with the latest company information. Please confirm if you would like us to contact you by checking yes or no below. You can unsubscribe at any time.

    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

    LENA James
    LENA James
    We moved accountants to specifically follow David a number of years ago and have completely changed the running of our business for the better, through planning ahead we have managed to change our circumstances with an over drawn loan account and corporation and tax bills outstanding to a strategically run method of being able to clear the over drawn loan account and balance our other tax liabilities with advice and support from David We continue to be supported and take advice from his expert knowledge and guidance going forward and would highly recommend the Steven Burton team for your Accountancy needs.
    Great service. Helpful and friendly people.
    Vince Strafford
    Vince Strafford
    We moved our accountancy needs to Steven Burton and Co - specifically with David. It’s been night and day compared to our previous provider - we now have a partner who is helping us to develop our business and in a way that means we have long term security. Local, accessible and responsive - everything we need in a company that provides business critical services.
    The team here are fantastic - every detail thought of and explained clearly. I have no hesitation in recommending Steve and the team to any business, be it fledgling or established. You get what you pay for and more.
    Jo C
    Jo C
    The team at Steven Burton & Co have been lovely to work with, helping us with our partnership accounts over the last couple of years. They are always on hand to answer any queries we have and are happy to explain in as much detail as we require. Everyone we have spoken to has been polite, welcoming and extremely knowledgeable and we look forward to continuing to work together as our business grows.
    Sam Nagle
    Sam Nagle
    A truly fantastic accountants. Unlike any other accountants we have had in the past. They are 100 percent on the ball, helpful with fantastic advice. Not just sound accountancy advice but advising the business as a whole in various areas. Strategic quarterly reviews to really delve into the business to make sure profit margins are where they should be, and if they aren’t, they’ll look into improvements that can be made. Nothing is too much and the phone lines are always open for advice. Unlike most accountants their focus isn’t just on completing your annual accounts and not seeing you again for another year. I cannot praise the team enough for all the hard work they put in! They really have shifted our focus onto the aspects of the business that we were perhaps neglecting!
    Steve Lincoln
    Steve Lincoln
    The team at Steve Burton & Co provide a first class personal service to their customers. They support business owners through every step of the life cycle of their business, adding true value with their relationship.
    Toby Ishmael
    Toby Ishmael
    I work closely with the team at Steven Burton & Co. to assist their clients with a range of services and I can't speak highly enough of the professionalism and care that they demonstrate for their clients.
    Darren Vass
    Darren Vass
    I've worked with Steven Burton & Co for almost 4 years and I cannot fault their service. Dominique in particular is always available for advice and guidance whenever needed.
    Makala Balls
    Makala Balls
    The team at Steven Burton are friendly, professional and really get to know their clients so their advice is tailored to suit their individual needs. Cuts through all the jargon and offer clear and timely advice. Would highly recommend.