The Treasury published a new Finance Bill on 21 November 2022. This is a short Bill which deals with some of the more straightforward tax changes announced in the Autumn Statement on 17 November. According to the UK Parliament website, Committee and all remaining stages are scheduled for 30 November 2022. Should the Bill gain Royal Assent before the end of the year (as expected), it will become Finance (No 2) Act 2022.
The accompanying press release confirms that a Spring Budget and Spring Finance Bill will follow in 2023 in the usual way, picking up ‘remaining tax measures needed ahead of April 2023’.
The Bill is structured as follows:
Energy (oil and gas) profits levy
Clause 1: energy profits levy (EPL): increase in rate of tax from 25% to 35%, applying for accounting periods beginning on or after 1 January 2023;
Clause 2: EPL: reducing the amount of the additional investment expenditure, applying to expenditure incurred on or after 1 January 2023; and
Clause 3: EPL: extending the period for which tax has effect to 31 March 2028 (previously 31 December 2025).
Corporation tax
Clause 4: R&D tax reliefs: from 1 April 2023, the research and development expenditure credit (RDEC) rate will be increased to 20% from 13%, the SME deduction rate will be reduced to 86% from 130%, and the small and medium enterprise credit rate decreased to 10% from 14.5%.
Income tax
Clause 5: income tax thresholds: basic rate limit and personal allowance will be frozen for a further two tax years (2026/27 and 2027/28);
Clause 6: threshold for the additional rate of income tax will be lowered from £150,000 to £125,140 and will apply from the tax year 2023/24; and
Clause 7: dividend allowance: dividend nil rate threshold will reduce from £2,000 to £1,000 for tax year 2023/24, and then to £500 for tax year 2024/25 onwards.
Capital gains tax
Clause 8: capital gains tax annual exempt amount (AEA): in 2023/24 the AEA will be £6,000 for individuals and personal representatives, and £3,000 for most trustees of settlements. In tax years on and after 2024/25 it will be £3,000 for individuals and PRs and £1,500 for trusts.
Inheritance tax
Clause 9: inheritance tax: thresholds will be fixed at their current levels for 2026/27 and 2027/28.
Taxation of vehicles
Clause 10: vehicle excise duty (VED): removal of VED exemption for electrically propelled vehicles will take effect from 1 April 2025; and
Clause 11: taxable benefits: appropriate percentage for cars with a CO2 emissions figure – sets the percentages for 2025/26, 2026/27 and 2027/28
HMRC has published Tax Information and Impact Notices setting out the background to the changes included in the Bill. Explanatory notes are available from the Finance Bill page on the UK parliament website (under the Publications tab).
The Treasury published a new Finance Bill on 21 November 2022. This is a short Bill which deals with some of the more straightforward tax changes announced in the Autumn Statement on 17 November. According to the UK Parliament website, Committee and all remaining stages are scheduled for 30 November 2022. Should the Bill gain Royal Assent before the end of the year (as expected), it will become Finance (No 2) Act 2022.
The accompanying press release confirms that a Spring Budget and Spring Finance Bill will follow in 2023 in the usual way, picking up ‘remaining tax measures needed ahead of April 2023’.
The Bill is structured as follows:
Energy (oil and gas) profits levy
Clause 1: energy profits levy (EPL): increase in rate of tax from 25% to 35%, applying for accounting periods beginning on or after 1 January 2023;
Clause 2: EPL: reducing the amount of the additional investment expenditure, applying to expenditure incurred on or after 1 January 2023; and
Clause 3: EPL: extending the period for which tax has effect to 31 March 2028 (previously 31 December 2025).
Corporation tax
Clause 4: R&D tax reliefs: from 1 April 2023, the research and development expenditure credit (RDEC) rate will be increased to 20% from 13%, the SME deduction rate will be reduced to 86% from 130%, and the small and medium enterprise credit rate decreased to 10% from 14.5%.
Income tax
Clause 5: income tax thresholds: basic rate limit and personal allowance will be frozen for a further two tax years (2026/27 and 2027/28);
Clause 6: threshold for the additional rate of income tax will be lowered from £150,000 to £125,140 and will apply from the tax year 2023/24; and
Clause 7: dividend allowance: dividend nil rate threshold will reduce from £2,000 to £1,000 for tax year 2023/24, and then to £500 for tax year 2024/25 onwards.
Capital gains tax
Clause 8: capital gains tax annual exempt amount (AEA): in 2023/24 the AEA will be £6,000 for individuals and personal representatives, and £3,000 for most trustees of settlements. In tax years on and after 2024/25 it will be £3,000 for individuals and PRs and £1,500 for trusts.
Inheritance tax
Clause 9: inheritance tax: thresholds will be fixed at their current levels for 2026/27 and 2027/28.
Taxation of vehicles
Clause 10: vehicle excise duty (VED): removal of VED exemption for electrically propelled vehicles will take effect from 1 April 2025; and
Clause 11: taxable benefits: appropriate percentage for cars with a CO2 emissions figure – sets the percentages for 2025/26, 2026/27 and 2027/28
HMRC has published Tax Information and Impact Notices setting out the background to the changes included in the Bill. Explanatory notes are available from the Finance Bill page on the UK parliament website (under the Publications tab).
