The new Chancellor Jeremy Hunt delivered his Autumn Statement this morning, addressing a £55 billion gap in the public finances. The Statement includes some significant tax increases, primarily through the freezing of tax thresholds and the reduction in some tax exemptions and allowances.

The tax announcement highlights include:

Income Tax:

The threshold for the additional (45%) rate will reduce from £150,000 to £125,140.

The Income Tax thresholds will be frozen for a further two years, until 2028.

Dividend Allowance to be cut from £2,000 to £1,000 in 2023-24 and to £500 from April 2024.

National Insurance

The Employment Allowance will be maintained at £5,000 until 2026.

Employer threshold frozen until 2028.

Capital Gains Tax

 The Annual Exempt amount will be reduced from £12,300 to £6,000 for 2023-24 and to £3,000 from April 2024.

Inheritance Tax

The Nil Rate Band of £325,000 will be frozen for an additional two years to 2028.

Research & Development tax credits

 R&D tax relief for the SMEs deduction rate cut to 86% and the credit rate to 10% but increase the rate of the separate R&D expenditure credit from 13% to 20%.

Stamp Duty Land Tax (SDLT)

The SDLT cuts announced at the Mini-Budget will now be time limited, ending on 31 March 2025.

Energy Profits Levy

Increase to 35% from January 2023 until 2028.

VAT

The VAT registration threshold will be held at £85,000 until March 2026.

Electric Vehicles

Will no longer be exempt from Vehicle Excise Duty, from April 2025.