Chancellor Jeremy Hunt announced the Autumn Statement last week (17th November 2022).

We have summarised the key points and how they may impact you as a business owner and your clients:

Income Tax frozen

Income tax rates and personal allowances will remain at the same level until at least April 2028. This will mean more workers fall into higher tax brackets as wages increase with inflation.

The threshold at which people start paying the top 45p rate of Income tax will be lowered from £150,000 to £125,140 from April 2023.

Cutting the basic rate by 1p to 19p will no longer be the case. The basic rate of income tax will stay at 20% indefinitely.

Dividend Rate

The government has also confirmed that, from April 2023, the rates of taxation on dividend income will remain as follows:

• the dividend ordinary rate – 8.75%
• the dividend upper rate – 33.75%
• the dividend additional rate – 39.35%.

Tax-free allowances for dividend is due to be cut over the next two years. The Dividend allowance will reduce from £2,000 to £1,000 in April next year and then reduced to £500 from April 2024.

Corporation Tax

Plans for the rise from 19% to 25% Corporation Tax will go ahead in April 2023. This will affect companies with over £250,000 in profits.

IR35 Legislation for Contractors

Off-payroll working rules also know as IR35 reforms (2017 and 2021) will continue to stay.

The full Autumn Statement is here.

Author: Mary Asante | HRi Director