The Chancellor of the Exchequer, Jeremy Hunt, delivered his Autumn Statement today.??The Chancellor had tricky job of attempting to fill the gaping hole in public finances whilst also appeasing his Party’s low tax enthusiasts.?It is, therefore, perhaps no surprise that many personal allowances and thresholds have been frozen for an extended period, which will mean inflation will likely push more individuals into higher rates of income tax….
?We have set out some key points below:
- ?The additional rate (45%) Income Tax threshold is being reduced from ￡150,000 to ￡125,140 from April 2023.?Other income tax and national insurance contribution thresholds will remain at current levels until 2028. The Personal Allowance will still be clawed back for income in excess of ￡100,000.
- ?The Dividend Allowance will be reduced from ￡2,000 to ￡1,000 from April 2023, and to ￡500 from April 2024. No changes to dividend tax rates.
- ?The Capital Gains Tax (CGT) Annual Exempt Amount will be reduced from ￡12,300 to ￡6,000 from April 2023 and then reduced further to ￡3,000 from April 2024. But contrary to much prediction, rates remain unchanged.
- ?CGT Anti-avoidance rules will be introduced to address scenarios where shares in non-UK companies are acquired in exchange for securities in a UK close company (where an individual has a material interest in both). This will result in the non-UK shares being considered UK situs.
- ?The previously announced Stamp Duty Land Tax (SDLT) cuts will remain in place until 31 March 2025.
- ?The Inheritance Tax (IHT) nil-rate band will continue at ￡325,000, the residence nil-rate band will continue at ￡175,000, and the residence nil-rate band taper will continue to start at ￡2 million. This is scheduled to remain at those levels until April 2028.
- ?The VAT registration threshold will remain at ￡85,000 until April 2026.
- ?The annual investment allowance (AIA) will be set at ￡1,000,000 from April 2023 and no longer be temporary.
- ?Certain reforms to Research and Development (R&D) tax reliefs were announced and a new consultation will be launched on reforming and enhancing the audio-visual creative reliefs.
- ?From April 2023, large multinational businesses operating in the UK will be required to keep and retain transfer pricing documentation in a prescribed and standardised format.
- ?The annual chargeable amounts for the Annual Tax on Enveloped Dwellings (ATED) will be uplifted by 10.1% from April 2023.
- ?The introduction of an Online Sales Tax (OST) will no longer be proceeding.
- ?The Office of Tax Simplification (OTS) is no longer being abolished.
- ?￡79 million will be invested in HM Revenue & Customs over the next 5 years to enable them to allocate additional staff to “tackle more cases of serious tax fraud and address tax compliance risks among wealthy taxpayers”.?
