Key Amendments Announced in the Autumn Statement 2022

In this article, we pull out the key amends announced in the Autumn Statement that you’ll need to be aware of in terms of your CII exams. This article is particularly relevant to R01, R03, AF1, R02, AF4, CF6 and R07.

This article is relevant to examinable tax year 2022/23 and is correct as at 6 December 2022.

In November, it was Chancellor Jeremy Hunt’s turn to tinker with our taxes (as well as the country’s spending plans). Savings of £55bn were announced, with around half of that amount coming from a combination of explicit and stealth tax rises. 

Income Tax – Tax thresholds frozen for longer

The personal allowance of £12,570 from 2021/22 will remain at this level until 5 April 2028, two years later than previously stated. 

Income Tax – Reduction of the additional rate threshold

From 6 April 2023, the 45% additional rate will apply from £125,140 rather than £150,000. 

Income Tax – Dividend allowance reduction

From 6 April 2023, the dividend allowance will fall from £2,000 to £1,000.

From 6 April 2024, it will fall again to £500. 

National Insurance Contributions – Frozen thresholds

The Class 1 primary contribution threshold, Class 2 lower profits limit and Class 4 upper earnings limit will remain at their current levels until 5 April 2028.

The lower earnings limit and the small profits threshold will remain at their current levels for the 2023/24 tax year.

Capital Gains Tax – Reduction to annual exempt amount

From 6 April 2023, the CGT annual exempt amount (for individuals and legal personal representatives (LPRs)) will fall to £6,000 (from £12,300).

The amount for trusts will fall to £3,000, subject to a minimum of £600 where shared across a number of trusts.

From 6 April 2024, it will fall again to £3,000 (individuals and LPRs) and to £1,500 for trusts (subject to a minimum of £300.) 

Inheritance Tax – Tax thresholds frozen for longer

The nil rate band and residence nil rate band are expected to remain at their current levels until 5 April 2028, two years later than previously stated. 

State Benefits – Increased in line with inflation

Most State benefits, including the Basic and New State pensions will increase by the September 2022 CPI rate of 10.1%. The benefit cap will also increase.

Social Care Funding in England – Delayed

The health and social care reforms that should have been implemented from October 2023 have been deferred until October 2025. 

Business Taxes

The secondary contribution threshold and employment allowance for National Insurance will remain at their current level until 5 April 2028.

The VAT registration threshold remains at £85,000 (deregistration at £83,000) until 1 April 2026.

Research and development (R&D) tax reliefs will change from 1 April 2023 to:

• R&D expenditure credit rate: increases to 20% (from 13%)
• Small and medium-sized enterprises (SME) deduction: falls to 86% (from 130%)
• SME credit rate: decreases to 10% (from 14.5%)

The CII states:

 “Candidates will be examined on the basis of law and practice in England unless otherwise stated.  The general rule is that the new tax year and changes arising from the Finance Act will be examined from 1 September each year. So, changes coming into effect on 6 April 2023, will be examined from 1 September 2023. Other changes, not related to the Finance Act, will not be examined earlier than 3 months after they come into effect.”