Blog Post

Autumn Statement 2022 – Impact on small businesses

The government were very clear that the Autumn Statement would announce a raft of tax increases, and the new Chancellor delivered that policy on Thursday.

Alongside budget cuts and supposed investment in infrastructure, the key tax changes were:

  • The Capital Gains Tax annual exemption to be cut from £12,300 to £6,000 per annum, and halved to £3,000 in April 2024 (for individuals)
  • The Inheritance Tax nil rate band remains at £325,000 per person until April 2028 (for individuals)
  • National Insurance Contributions thresholds will largely remain at current levels until April 2028
  • National Minimum Wage rates will increase (the main rate being an increase from £9.50 to £10.42 per hour for adults 23+)
  • New zero-emission cars registered on or after 1 April 2025 will be liable to pay vehicle excise duty (road tax)
  • The Annual Investment Allowance will remain set at £1m, rather than reducing to £200,000 in the future
  • Individuals will pay additional rate tax (45%) from £125,000 instead of £150,000
  • Personal allowance thresholds remain at the current level until April 2028 (for individuals)
  • Dividend allowance to be cut from £2,000 to £1,000, and then again to £500 (for individuals)

Most of these changes will take effect from April 2023.

These follow on from the announcement that Corporation Tax will increase from 19% to 25% from 1 April 2023. There will be a tapered rate for those making profits between £50,000 and £250,000.

There were also some pretty hard hitting changes to R&D Tax Credits, with SME relief reducing from 130% to 86%, and the rate that losses can be surrendered for payable credit being reduced from 14.5% to 10%.

All in all, small business owners can be forgiven an extra stiff drink this weekend.

Having said that, there remains tax planning opportunities for businesses and individuals alike.

Make sure you speak to a specialist tax advice consultant if you have any questions about the upcoming changes. At Roake & Cook, we are advising clients to focus on what they can control. Plan effectively and focus on making a profitable business more profitable.