On 17 November 2022, the government undertook the third fiscal statement in as many months, against a backdrop of rising inflation and economic recession. The Chancellor laid out three core priorities of stability, growth and public services. The government sought a balanced path to support the economy and return to growth, partially through public spending restraint and partially through tax rises.
- 45% tax rate threshold reduced from £150,000 to £125,140, meaning people earning £150,000 or more will pay an extra £1,243 of tax;
- Dividend allowance cut from £2,000 to £1,000 from April 2023 and to £500 from April 2024;
- Tax free personal allowance, Employees National Insurance Contribution and 40% higher rate tax thresholds frozen at current levels until at least April 2028;
- Capital Gains Tax Annual Exemption to reduce from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024;
- Inheritance Tax nil rate band and residence nil rate band frozen until April 2028;
- Benefit in kind rates for Electric and Ultra-Low Emission Cars will remain lower, but will rise by 1% per year from April 2025
- Employment Allowance against Employer’s National Insurance Contributions to remain at £5,000 each year;
- The threshold at which Employer National Insurance Contributions become payable for each employee will be frozen until April 2028;
- VAT registration threshold to be frozen until March 2026;
- The rate of R&D tax relief for SMEs is to be reduced from April 2023 from 130% additional deduction to 86%;
- The R&D Expenditure Credit will be increased from 13% to 20%. RDEC is available to companies of all sizes;
- From April 2023 business rates in England will be updated to reflect property values from that date (previously based on 2017 values). A transition scheme will be operated for businesses whose rates increase as a result of the revaluation.
- The reductions in Stamp Duty Land Tax announced at the mini-Budget will be maintained until March 2025;
- From April 2025 Electric Vehicles will no longer be exempt from Vehicle Excise Duty