Impact of the Autumn Statement on businesses
Posted on 29th November 2022 at 15:24
In comparison to the mini-budget, there isn’t much to assist businesses in the Autumn Statement but there are some changes that you should be aware of as these could impact your business.
Business Rates - The one support mechanism for businesses included in the Autumn Statement was that Business Rates multipliers will be frozen in 2023-24. There is also additional support for retail, hospitality and leisure businesses with relief increasing from 50% to 75% in 2023-24.
There will also be support for businesses that are adversely affected by the revaluation of their properties for Business Rates which takes effect in April 2023. There will be a £1.6 million Transitional Relief Scheme to cap bill increases, for example, the smallest properties will be capped at 5%. If you lose eligibility for small business or rural rate relief, there will be a cap of £50 per month increase through a different scheme that is £500 million in size.
National Insurance Contributions (NICs) – The employers’ NIC threshold is frozen until April 2028. The employment allowance is being retained at the higher level of £5,000 until March 2026.
Living wage – The minimum wage will be increased by 9.7% in April 2023 to £10.42 which will help two million of the lowest paid workers, however, this may adversely impact your budget.
Annual Investment Allowance (AIA) - will remain at £1 million in April 2023 permanently and not drop to £200,000 as originally planned. This was announced prior to the Autumn Statement but it has been reconfirmed.
Dividend Allowance - For business owners who take dividends, the tax-free allowance for dividends will be reduced from £2,000 to £1,000 in April 2023 and £500 in April 2024. This change means it will be important to do personal tax planning in 2023-24 to ensure that your personal income from your business is done in the most tax-efficient way.
Capital Gains Tax allowances - will also be reduced from £12,300 to £6,000 in April 2023 and to £3,000 in April 2024 which means that disposing of assets will be subject to a greater amount of tax.
The unknown element is what happens next with the Energy Bill Relief Scheme for businesses from April 2023 as there was nothing in the Autumn Statement about extending the scheme for businesses. The scheme was going to be under review midway through with decisions made as a result of it on whether the support would be extended for businesses and to those most impacted. So, the assumption is that this still applies.
Full details of the Autumn Statement can be found on gov.uk.
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