Autumn statement, 2022
TLDR = spending cuts + tax increases.
In news that won’t shock many, taxes are up and spending down. The full document is here if you’re inclined…. And if not, here’s a quick run down on some of the main points:
Off-payroll reforms
The off-payroll reforms for 2017 and 2021 were repealed in the Truss Growth Plan, and then a few weeks later reinstated. The Autumn Statement shows no further change here.
Income Tax
The only change to income tax is at the higher rate of tax. The higher rate tax threshold is dropping from £150,000 to £125,140
The Income tax thresholds were to be frozen until 2026 but, the chancellor today extended that freeze to 2028.
Band Taxable income Tax rate
Personal Allowance Up to £12,570 0%
Basic rate £12,571 to £50,270 20%
Higher rate £50,271 to £125,140 40%
Additional rate over £125,141 45%
Dividend Tax
Dividend tax has been raised by 1.25% points alongside the rise in NICs.
8.75% for lower-rate taxpayers
33.75% for higher-rate taxpayers
39.35% for additional-rate taxpayers
Dividend tax-free allowances
These are cut from £2,000 to £1,000 from 2023. This allowance is effectively being removed, with a further cut to just £500 in 2024.
National Insurance Contributions
The threshold remains at £12, 570 - and this threshold is locked in until 2028.
Corporation Tax
Corporation tax rates, having been cancelled in the Truss Growth Plan, have also now been reversed.
Corporation tax for most small businesses will remain at 19% (if profits are under £50k), but will rise to 25% for those with over £250k profit, from April 2023. There was no change to this in the Autumn Statement.
VAT
The VAT threshold rate is currently set at a turnover of £85,000 and in this autumn statement, this has been locked in, until 2026.