Last week, the Chancellor delivered his Autumn Statement. He confirmed that the UK is officially in recession and outlined £55 billion worth of tax rises and spending cuts.
In response to the Autumn Statement, we have expressed our disappointment that it should have gone much further to reduce the costs of doing business and the upward trend in prices.
Despite making clear to the Treasury of the impact of fuel prices we were disappointed that no further action has been taken to reduce fuel duty. We will continue to emphasise the need for our proposed Essential User Rebate of at least 15 pence per litre. This is an anti-inflationary measure which will help ease fiscal pressures in the supply chain and reduce the rising cost of living for everyone. We will be pushing for this to be considered for the Spring Budget 2023.
We welcome the energy support package for businesses until April, and the steps taken to assist businesses affected by the Business Rates revaluation, particularly the relief from rate increases as a result of property development. We will be working closely with the Government’s review of the Energy Bill Relief Scheme to ensure our industry’s critical role is properly considered and additional support maintained.
We were also pleased to see the Chancellor’s commitment to infrastructure as a priority for growth, but we need a renewed focus on roads investment at all levels of government across the UK if we are going to keep British businesses and supply chains moving.
Whilst the Chancellor did not outline any changes to fuel duty in his Autumn Statement, fuel duty featured in the accompanying forecast produced by the Office for Budget Responsibility (OBR). In its forecast, the OBR outlined that fuel duty would increase by 12p per litre if Government takes no action to reduce or freeze it for the Spring Statement. We are seeking urgent assurances from the Chancellor that this will not happen.
Below are the key announcements:
Personal Taxes
The threshold at which the 45p rate of income tax kicks in will be reduced to £125,140 from £150,000 from 6 April 2023.
Personal tax thresholds will be maintained at current levels for a further 2 years, until April 2028.
The tax free dividend allowance will be reduced to £1,000 in 2023/24, and then to £500 in 2024-25.
The tax free allowance for capital gains will be reduced in 2023/24 from £12,300 to £6,000 and then be further reduced to £3,000 in 2024-25.
From 2025, road tax will be introduced for electric vehicles.
The Stamp Duty cuts announced in the Growth Plan will now be time-limited, ending on 31 March 2025.
Business Taxes
From December 2023, the OECD’s global tax reforms will be introduced. This will ensure that multinational corporations, including big tech companies, pay the right tax in the countries they operate in.
The government will provide a £13.6 billion package of business rates support.
The planned increase in the Corporation Tax rate to 25% for companies with over £250,000 in profits will go ahead.
The NICs Secondary Threshold for employers will be maintained at £9,100 until April 2028.
The VAT registration threshold will be maintained at £85,000 for two years from April 2024.
The government is setting the Annual Investment Allowance at its highest ever permanent level of £1 million from 1 April 2023.
Energy
The government is extending the Energy Profits Levy to the end of March 2028, and increasing its rate to 35% from 1 January 2023.
The government will consult stakeholders over the coming months as part of a review of the UK’s long-term tax treatment of the North Sea after the Energy Profits Levy ceases.
The government will introduce a new, temporary 45% Electricity Generator Levy from 1 January 2023.
The government will proceed with a new nuclear power plant at Sizewell C with contracts to be signed in the coming weeks.
An energy efficiency taskforce will be established, backed by £6 billion in new funding. It aims to support the UK to reduce its energy demand from building and industry by 15% by 2030.
Work and Pensions
The National Living Wage will be raised to £10.42 from April 2023.
The National Minimum Wage will also see a substantial boost.
£280 million investment to help the Department for Work and Pensions (DWP) to crack down on fraud, error and debt across the benefit system.
600,000 more people on Universal Credit will have to meet with work coaches to increase their hours and earnings.
The managed migration to Universal Credit will be pushed back to 2028.
DWP will be asked to do a thorough review of issues holding back workforce participation, reporting in January 2023.
The review of the state pension age will conclude in 2023.
Working age benefits will rise by the rate of inflation at 10.1% and the household benefit cap to be increased from April 2023.
Homeowners on Universal Credit will be able to apply for Support for Mortgage Interest loans after 3 months instead of 9 months, including those in employment.
Pensions Triple Lock and Pension Credit will be protected and rise in April 2023 by 10.1%.
Cost of Living
The energy price guarantee will continue from April at a higher level of £3000.
Further cost of living payments will be made next year.
Households on means-tested benefits will receive £900.
Pensioner households to receive £300.
Individuals on disability benefits will receive £150.
Education
Sir Michael Barber will advise on the skills reform programme.
Transport
The building of new infrastructure such as roads, train lines and communities will be safeguarded by over £600 billion in capital investment over the next 5 years.
Northern Powerhouse rail and HS2 still going ahead as planned.
Miscellaneous
Round 2 of the Levelling Up Fund will invest at least £1.7bn in local projects across the UK.
Devolution deal will bring an elected mayor to Suffolk, Cornwall and Norfolk. North East to follow shortly and soon over half of England will be covered by devolution deals.
The government remains committed to supporting digital infrastructure investment through Project Gigabit, with an ambition to reach at least 85% gigabit-capable broadband