This special edition focusses on the tax measures announced by the Chancellor in his Autumn Statement. Please contact us if you wish to discuss any matters in this newswire further.
Capital Gains Tax Annual Exemption Cut
Many were predicting that the rates of Capital Gains Tax (CGT) paid by individuals would increase, possibly to align with the rates of income tax. Instead, the Chancellor has announced that the current £12,300 annual tax-free CGT exemption (or allowance) will be reduced to just £6,000 in 2023/24 and only £3,000 in 2024/25.
This change will mean that those disposing of investments such as shares, second homes and buy-to-let properties will pay more tax. If you are planning any capital disposals, please contact us to discuss the best strategy for timing of sale.
VAT Registration Limits Unchanged
The VAT registration threshold continues to be frozen at £85,000, instead of increasing each year in line with inflation. This will remain the case until March 2026.
Cars, Vans and Taxation
For those provided with an electronic or ultra-low emission company car (emitting less than 75g of CO2 per kilometre), there will be annual increases in the benefit-in- kind percentages, and therefore the taxes paid by both employees and employers, from the 2025/26 tax year.
For all other company car users, there will be a 1 percentage point increase (up to a maximum of 37%) in the calculation of the benefit-in- kind in 2025/26 before being fixed for the following two tax years.
The fixed multipliers used to calculate benefits-in-kind on employer provided vans, van fuel (for private journeys in company vans) and car fuel (for private journeys in company cars) will increase in line with the Consumer Price Index (CPI) from 6 April 2023. The government have also announced that they will introduce Vehicle Excise Duty on electric cars, vans and motorcycles from April 2025.
R&D Rebalancing
The Chancellor has again expressed concerns about the alleged abuse of research and development (R&D) tax reliefs.
Alongside plans to merge two existing schemes in future, he announced that, from 1 April 2023.
- The Research and Development Expenditure Credit (RDEC) available to non-SME companies would be increased from 13% to 20%.
- For loss-making SME companies, the payable credit will be reduced from 14.5% to 10%.
- For SME companies, the additional R&D tax relief deduction will be reduced from 130% to 86%.
A Mini U-turn on Stamp Duty Land Tax (SDLT)
One of the few changes announced on 23 September that has not been reversed concerns Stamp Duty Land Tax (SDLT) in England and Northern Ireland. The starting threshold was increased from £125,000 to £250,000 (and, for First Time Buyers,
from £300,000 to £425,000) from 23 September 2022.
However, it has now been announced that these are to be temporary changes, and, from 1 April 2025, the thresholds will return to their original rates.
And Finally….
As previously announced and as we head into 2023;
The £1million Annual Investment Allowance – giving 100% tax relief to businesses investing in qualifying plant and machinery – is now permanent.
- The £1million Annual Investment Allowance – giving 100% tax relief to businesses investing in qualifying plant and machinery – is now permanent.
- The Government is increasing the generosity and availability of certain Venture Capital Schemes, including the Seed Enterprise Investment Scheme for start-up companies.
And finally, in all matters, we are here to help you. Please do get in touch about any of the Autumn Statement measures or otherwise.
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