November 2022 Newsletter | Cylchlythyr Misol Tachwedd 2022
AUTUMN STATEMENT SPECIAL
Positive developments
- Energy Price Guarantee will continue from April 2023, with typical bills capped at £3,000 a year rather than the current cap of £2,500 a year.
- Additional cost-of-living payments to support the vulnerable, including £900 to those on means-tested benefits, £300 to pensioners and £150 to those on disability benefit.
- The State Pension will increase by 10.1% from April 2023.
- National Living Wage will rise to £10.42 from 1 April 2023 for those aged 23 and over.
Less favourable changes
- Income tax personal allowance and higher rate tax threshold frozen at their current level until 2028. This will mean as wages rise over the coming years, more tax will be paid by everyone even if income tax rates remain the same.
- Inheritance tax thresholds will also remain at the current rate until 5 April 2028.
- Tax-free dividend allowance will be reduced from £2,000 to £1,000 in April 2023 and halved again to £500 from April 2024. This is likely to lead to more individuals being captured by tax reporting requirements.
- Capital gains tax annual exempt amount of £12,300 to be reduced to £6,000 in April 2023 and halved again to £3,000 from April 2024. This will lead to higher capital gains tax of over £1,000 per annum for anyone selling assets from April 2023.
If you are contemplating selling assets such as houses or investments, you may wish to do so before April 2023. If you require assistance with estimated capital gains tax calculations, please contact us. - Reduction in the additional rate (45%) income tax threshold from £150,000 to £125,140 from 6 April 2023.
- A review has been commissioned of the State Pension age which will likely lead to an increase in the starting age for the State Pension to 67 or possibly 68 in a few years' time.
- VAT registration threshold maintained at £85,000 until 1 April 2026, which may lead to a rise in the number of businesses that pay VAT simply as a result of rising inflation.
- Electric vehicles to pay £165 a year of Vehicle Excise Duty from 1 April 2025. New electric vehicles costing over £40,000 will also pay the expensive car supplement.
- Company car tax rates will increase on electric cars by 1 percentage point in each year from 2025-2026 to 2027-2028, up to a maximum of 5% for electric cars.
We will continue to keep you updated on significant tax changes and Government announcements!
