Autumn statement 2022: What does it mean for UK business?

Jeremy Hunt has announced £25 billion in tax rises and public spending cuts to help balance the books.

Addressing parliament today (November 17th), the Chancellor said he had to make “difficult decisions” to tackle inflation and restore financial credibility while protecting the most vulnerable in society.

Here’s a look at some of the most relevant aspects of the Autumn Budget for business owners.

Business rates revaluation to proceed​

Hunt said he would proceed with the revaluation of business rates from April 2023, which will be updated to reflect changes in property values since the last revaluation in 2017. To “soften the blow”, he said £14 billion will be available to help businesses struggling to pay the higher rates.

Hunt also said there would be a new government-funded transitional relief scheme, which would benefit about 700,000 businesses.

Business taxes​

The Chancellor said he would maintain VAT rates until March 2026. He also announced plans to freeze employers' NICs threshold until April 2028 and retain the employment allowance at its new higher level of £5,000.

“This means 40% of businesses will pay no NICS at all,” Hunt said.

Hunt said he had heard “concerning reports of abuse and fraud” in R&D tax relief for SMEs. As such, Hunt said he had decided to cut the deduction rate for the SME scheme to 86% and the credit rate to 10% but increase the rate of the separate R&D expenditure credit from 13% to 20%.

“Despite raising revenue the OBR has confirmed that these measures have no detrimental effect on R&D investment in the economy,” Hunt said.

Income tax​

Hunt said the government would reduce the threshold at which the top income tax rate is paid from £150,000 to £125,140. Income tax thresholds have been frozen for the basic and higher rates of tax

National living wage to increase​

The Chancellor said he had accepted a recommendation to increase the national living wage by 9.7%. This means the hourly rate will be £10.42 from April 2023.

Business growth​

Hunt said he would use “Brexit freedoms” to make the UK into the next “Silicon Valley”. He pledged to remove import tariffs on over 100 goods used in production.

He also said the government would change its approach to investment zones, which will now be centred on universities.

Electric cars​

Electric vehicles will no longer be exempt from vehicle excise duty from April 2025 to make the motoring tax system “fairer”, Hunt announced.

However, company car tax rates will remain lower for electric vehicles and Hunt said he will limit the rate increase to 1% a year for three years from 2025.

Dividend tax allowance​

The dividend allowance will be cut from £2,000 to £1,000 next year and then to £500 from April 2024.

Capital gains tax​

The annual exempt amount for capital gains tax will be cut from £12,300 to £6,000 next year and then £3,000 from April 2024.

Windfall tax​

Hunt said he had “no objection” to windfall taxes if they are genuinely about windfall profits from unexpected increases in energy prices.

The 25% levy on oil and gas company profits has been increased to 35% and extended until 2028. There will also be a new 45% levy on electricity generators. The combined measures will raise an estimated £14 billion.

Infrastructure spending increase​

Hunt said he would be allocating £600 billion to infrastructure projects over the next five years.

Energy efficiency​

An energy efficiency task force will be launched to help households, businesses and the public sector to save on energy bills.

Nuclear power​

Hunt said the government will proceed with plans to build a new nuclear plant at Sizewell in Suffolk, creating new jobs and opportunities.

Energy price cap​

The energy support scheme will rise to £3,000 from April and last until March 2024. It equates to an average support of £500. There was no announcement about support for business energy costs.

Pensions​

The pensions triple lock will be protected and will rise by 10% in April 2023.