Autumn Budget 2022: How does this impact UK businesses?

Measures that could impact businesses and workers, at a glance:

• Tax-free dividend allowance decrease

• Dividend tax rate increase

• Tax-free capital gains tax decrease

• Income tax freeze extended

• Highest earner tax threshold decrease

• Alcohol duty rise

• Road tax for electric cars

• State pension rise

• 2% public sector pay rise

• 15% energy consumption reduction by 2030

1. Dividend tax

The government will halve the tax-free dividend allowance from £2,000 to £1,000 from April 2023 and to £500 from April 2024. Additionally, the dividend tax rate has risen by 1.25 percentage points. The rise in corporation tax, which was announced in October, together with the new rise in dividend tax, means a limited company with a £50,000 yearly turnover will pay £5,000 more tax. 

2. Capital gains tax

The tax-free allowance for Capital Gains Tax has been halved from £12,300 to £6,150. This will take effect from April 2024. 

3. Income tax

The Chancellor has announced that the freeze to income tax has been extended for a further two years until April 2028. 

This means that as wages increase in line with inflation, more people will find themselves on the higher-rate income tax bracket, while others will start paying tax for the first time. Currently, the tax threshold for the basic rate is £12,570, the higher rate is £50,270, and the additional rate is £125,000.

4. Tax rise for highest earners

The threshold at which earners begin paying the 45p tax rate has been lowered from £150,000 to £125,140. This will cost those who earn £150k an additional £1,250 extra per year.

5. Alcohol duties - but not cigarettes

Mr Hunt announced that alcohol duties have risen. Although cigarette duties have remained the same, they are expected to rise in a Budget in the Spring.

6. Road tax on electric cars

Electric car owners will start paying road tax, it has been confirmed. Previously, drivers have been encouraged to swap their fuel-powered vehicles for electric ones, with no excise duty as an incentive. However, this would leave a £7 billion shortfall.

7. State pension

The 2019 Conservative manifesto promised to raise pensions by the triple lock: the highest of earnings (5.5%), inflation (10.1%), or 2.5%. 

The state pension will rise by 10.1% in April 2023, Mr Hunt has announced, which means the state pension amount will increase from £185.15 to £203.85 a week.  According to reports, ministers are considering scrapping the triple lock after 2025.

8. 2% public sector pay rises

While public sector pay will be decided in 2023, the Chancellor announced that pay rises could be limited to 2% in 2023/24. The announcement comes amid strikes announced by nurses and 100,000 civil servants.

There were further measures announced in the statement that will impact businesses and households, including cuts to public spending, changes to HS2 investment and a delay to the cap on social care costs. 

To view the statement in full, visit this page.

9. Energy consumption targets

A new target to reduce energy consumption from buildings and industry by 15% by 2030 has been set. The Chancellor said that by doubling annual investment in energy efficiency, it will enable us to meet our net zero targets.

Next steps: How can Funding Options help?

With the Autumn Statement not offering much in terms of optimism for SMEs, and with inflation at a record high, we understand that many businesses are in need of additional funding at this time.

From Recovery Loan Scheme facilities to many other types of business finance, we can help. Funding Options has been chosen by the government-owned British Business Bank as a designated platform to find finance for businesses.

Even if your credit history is less-than-perfect, you might be able to access business finance through one of the 120+ lenders we work with. 

A few options include unsecured term loans, merchant cash advances, revolving credit facilities and invoice finance. Whatever your circumstances, see what you could be eligible for today.