The Autumn Budget 2022

(2 minutes to read)

On Thursday 17th November 2022, Chancellor Jeremy Hunt announced the details of the Autumn Statement, stating that the next two years would be ‘challenging’.

With the government making a U-turn on so many promises made in the Mini-budget, this Autumn Statement needed to be an honest one that the government could deliver on, as REC Chief Executive Nail Carberry said: ‘Today’s Autumn Statement was rooted in the reality of the country’s economic position - that alone is a step on from earlier in the Autumn.’

Here’s what you need to know as a limited company contractor:

Income Tax

There has been a lot of toing and froing with the basic rate of income tax – previously, the government announced that it would be cut from 20% to 19% from April 2024. This date was then changed to April 2023.

However, it has now been decided that this will remain at 20% until economic conditions allow it to drop.

During September’s Mini-budget, the government made the decision to abolish the 45% rate of income tax with a single higher rate of 40% in order to ‘incentivise enterprise and hard work and simplify the tax system’. However, this was another reversed decision and so not only will it remain at 45%, but the threshold will be reduced from £150,000 to £125,140 from April 2023.

Personal tax allowance (£12,570) and the higher rate threshold (£50,271) have been frozen until 2028.

National Living Wage / National Minimum Wage

Both the National Living Wage and National Minimum Wage will be increased from the 1st of April 2023.

These rates will be set at:

  • £5.28 an hour for apprentices
  • £5.28 an hour for 16-17-year-olds
  • £7.49 an hour for 18-20-years-olds
  • £10.18 an hour for 21-22-year-olds
  • £10.42 an hour for those 23 years old and over

Dividends

Another area that saw a reversal from the Mini-budget was dividends. The tax rates had changed and the additional rate was set to be abolished.

However, now the rates will remain as:

  • Basic rate – 8.75%
  • Upper rate – 33.75%
  • Additional rate – 39.35%

From April 2023, the government will also reduce the dividend allowance from £2,000 to £1,000. This will then drop again to £500 from April 2024.

Capital Gains Tax

The capital gains tax annual exempt amount will be reduced from £12,300 to £6,000 from April 2023, and then to £3,000 from April 2024.

Vehicles / Fuel

From April 2025, electric cars, vans and motorcycles will need to start paying Vehicle Excise Duty so that all road users are paying a fair tax contribution as the number of electric vehicle users continues to grow.

The price of fuel is also set to rise with a 23% hike in fuel duty from March 2023 – this adds another 12p per litre tax on petrol and diesel.

Energy

Windfall tax on oil and gas companies will increase from 25% to 35% until 2028.

The Energy Price Guarantee (EPG) will be upheld throughout the winter months, limiting typical energy bills to £2,500 per year and from April 2023 this figure will rise to £3,000.

The current Energy Support package will be revised from April 2023.

What about IR35?

Unfortunately, despite promises made during the Mini-budget that IR35 rules were to be simplified, this is no longer the case.

It was part of the many U-turns that took place shortly after the announcement, and at the time, the Association of Independent Professionals (IPSE) slammed the government for such a ‘spineless’ decision.

It came as a great disappointment that the Autumn Statement did not include any positive changes to IR35.

We hope you found this page helpful. If you’d like to sign up or need any further information, please call one of our friendly experts on 01442 795 100 or email sophie.lewis@dolanaccountancy.com.

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Why Dolan Accountancy?

Dolan Accountancy was set up by Simon J Dolan, the man behind the well-known brand SJD Accountancy. With over 25 years experience in the contracting marketing, Dolan Accountancy has the heritage, reputation and credibility you can trust. Working closely with our sister company, Contractor Umbrella, it means we can offer one low cost, fixed fee package at £105 + VAT per month. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost. We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours.
  • Free use of Contractor Umbrella – With changes in Public Sector IR35 Legislation we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, Contractor Umbrella.
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams.
  • Free Access to FreeAgent – The founder behind the multi award winning FreeAgent platform was one of Simon’s first clients, therefore it only seems fitting that we offer all of our clients access to FreeAgent, free of charge.
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year.
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status.
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative.
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few.
  • Same day payments- We offer same day payments as standard providing funds are received into our account by 9am, for no additional fee.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.

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