Sean Lambert Chapman Lambert ChapmanI listened to the new Chancellor, Jeremy Hunt’s Autumn Statement yesterday. Quite the opposite of the “mini budget” on 23 September which was already mostly reversed on 17 October.

Our recent Chancellor started with three main objectives Stability, Growth and Public Services. Later in the statement he went on to confirm that he had three growth priorities covering Energy Independence, Infrastructure and Innovation. This included a commitment to a new nuclear power station at Sizewell C which will provide energy to 6 million homes for 50 years. This sounds great, but it takes a long times to build a nuclear power station and we are paying the price now for not investing in our own energy generation over several decades.

In terms of tax changes, the Chancellor has been warning for weeks that those with “deeper pockets” need to pay more and we all need to contribute to bring public finances back on track.

The tax changes he is implementing is creating additional tax for many without actually changing any headline tax rates. These changes mainly effect individuals as businesses are already getting the Corporation Tax increase to 25% in April 2023:

  • Lowering of the additional rate (45%) tax starting rate from £150,000 to £125,140 (quite the opposite of the planned removal in the “mini budget”).
  • Freezing of the personal allowance, basic rate and higher rate thresholds until 2028. This means if individuals start earning more money each year they will move into higher rates of tax due to no increases in the threshold levels.
  • The £2,000 tax free dividend allowance is being reduced to £1,000 in April 2023 and then £500 in April 2024.
  • Every individual’s capital gain allowance of £12,300 is being slashed to £6,000 in April 2023 and then £3,000 in April 2024.
  • Electric cars will no longer be exempt from road tax from April 2025 and the company car benefit will increase 1% each year for 3 years from April 2025.
  • Stamp duty reduction in the “mini budget” has been kept until March 2025 to help the current housing market which is being hit as a result of higher interest rates.
  • Business national insurance contributions starting threshold is frozen until April 2028. In addition the business employment allowance towards the national insurance cost is frozen at £5,000.
  • The VAT threshold where businesses’ must register to charge VAT will remain at £85,000 until March 2026.

The black hole in public finances will also be supported by an increase in the windfall tax on energy companies from 25% to 35% from 1 January 2023 to March 2028 and low carbon energy generation will have a 45% windfall tax.

The chancellor is going to announce a transitional business rate relief scheme to help businesses’ but the full details along with the effect of the April 2023 revaluation for business rates are yet to be provided.

Finally the Chancellor confirmed commitment to support household energy costs by capping energy cost at £3,000 per average household for 12 months from April 2023. This is helpful support to individuals but the business support post March 2023 has not yet been announced. I have heard about some eye watering increases in business energy cost and ultimately if a business cannot cover this cost it will lead to job losses. If you have no job how can you pay any of your energy cost?

The markets seem relatively calm so I hope the Autumn statement has at least helped the current situation following the disaster which was created by the “mini budget”.

If you have any questions regarding the 2022 Autumn Statement and how the changes might affect you or your business, please get in touch.

Sean Wiegand – Partner

Lambert Chapman Chartered Accountants

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