2022 Autumn Statement Special 💷
💼 All the relevant Autumn Statement announcements for SMEs, including energy, fuel duty, National Insurance contributions, business rates, income tax, VAT, dividend tax, and more.
🦾 G O
💼 2022 Autumn Statement for SMEs
Bionic rounds up the most relevant bits of the 2022 Autumn Statement so you know exactly what to expect.
We’re just reporting the facts, and will leave it up to you to decide whether the Chancellor’s plans are good or bad for business. Check out our blog - Autumn Statement round-up for busy business owners - for a more detailed look at the announcements.
🏭 Business Energy
There was no mention of the Energy Bill Relief Scheme, so we have to assume it will end in March as originally announced. We’ll know if any other support will be offered following a review that’s due to take place around the turn of the year.
In the meantime, here’s a quick breakdown of how the scheme works 👇
To find out more about the Energy Bill Relief Scheme, click the button below.
To get a quote for business gas and electricity, give the business energy experts at Bionic a call now on 0808 253 2008.
🏠 Household Energy
The Energy Price Guarantee (the replacement for the old domestic energy price cap) will be extended for another 12 months from April. But households will pay more as the level of the cap will increase from £2,500 to £3,000 a year.
But remember, the Energy Price Guarantee is a cap on rates and not a cap on the overall bill. The figure of £3,000 a year is just an estimate based on average household usage, which means you could pay more or less than this amount, depending on how much energy you use.
👷♀️ National Living Wage
The national living wage - the minimum amount that can be paid to workers who are 23 and over - will rise from £9.50 an hour to £10.42 an hour from April 2023.
🤒 National Insurance Contributions
National Insurance thresholds will stay the same until April 2028.
This means that employees won't pay anything in National Insurance Contributions (NICs) until they're earning £12,570 a year. As an employer, you will still pay NICs at a rate of 13.80% for all employees that earn more than £8,840 per year (excluding those aged 21 or under and apprentices aged 25 or under).
The Employment Allowance will stay at £5,000 until March 2026. This means eligible employers can cut their employer NICs bills by up to £5,000 per year, a tax cut worth up to £1,000 per employer.
If you’re self-employed and pay "Class 4" rates, you’ll pay 9.73% on profits between £11,909 and £50,270 and 2.73% on profits over £50,270.
📨 S U B S C R I B E
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🏪 Business rates
Business rates are a tax on property used for business purposes, such as offices, shops, pubs, and warehouses. Check out the government website for more information on business rates.
Business rates relief for those in the hospitality, retail and leisure sectors will continue for another year. They will increase from 50% to 75% for 2023-24, up to £110,000 per business.
The business rates revaluation will also go ahead as planned to make sure the rateable value of business properties better reflects changes in the property market. But the government will fund a Transitional Relief Scheme to make sure changes to bills are phased in gradually. Find out more about this at the government website.
🤖 Research and Development tax relief
The Research and Development (R&D) tax relief scheme for SMEs offers support for companies that work on innovative projects in science and technology.
The deduction rate for the scheme will be cut from 100% to 86% and the credit rate will be cut from 14.5% to 10%. Find out more about Research and Development tax relief scheme for SMEs at the government website.
If your business gets an R&D expenditure credit, this will be increased from 13% to 20%. Find out more about R&D expenditure credits at the government website.
💼 Corporation Tax
From April 2023, the main rate of corporation tax will increase from 19% to 25%. But businesses with profits of £50,000 or below will still pay the small profit rate of 19%.
💷 Income Tax
The basic rate of income tax will stay at 20%, but the threshold for the additional 45% rate will drop from earnings of £150,000 a year to £125,140 a year. This means that the higher rate will be paid on an annual income of between £50,271 and £125,139.
The government plans to freeze these rates until 2027/28.
📊 Dividend Tax
The tax-free dividend allowance will be cut in half - from £2,000 to £1,000. This means you’ll now pay tax on any dividend income above £1,000. It will then be cut to £500 from April 2024.
🏘 Capital Gains Tax
If you sell shares at a profit, you’ll be charged capital gains tax on the money you make. If you’re a higher-rate taxpayer, you’ll pay a 20% capital gains tax on profits from shares. But the tax-free threshold is being cut from £12,300 to £6,000 next year. Then to £3,000 from April 2024. Find out more about capital gains tax at the government website.
📈 VAT
There'll be a two-year extension to the threshold at which businesses must start paying VAT. This will now be held at £85,000 of turnover until 2026.
📊 B U S I N E S S
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We’ll be back with Issue #46 of The Backbone on Friday, November 25 🌑