The tax rises announced during today’s Autumn Statement were inevitable following the recent economic turmoil. The Chancellor unveiled a plan on how the Government will repay the immense amounts borrowed for the Covid support packages whilst also supporting households with increasing energy costs.
What we have seen today is a further tax increase on business owners where they receive dividend income. The tax free allowance is decreasing by £1,000 from April 2023. With tax thresholds being maintained at the current levels and dividends expecting to rise to cope with the cost of living, the tax payable will be a greater burden . This is at the same time that retained profits will be falling with the increased corporation tax, giving business owners a feeling that they are picking up more than their fair share of the tax rises.
Directors and employees who receive a benefit in kind for an electric company car will also start to see an increase in tax with rates increasing from 2025.
If you have any questions regarding the 2022 Autumn Statement and how the changes might affect you or your business, please get in touch.
Craig Weavers – Partner