A summary of tax measures announced or confirmed at the 2022 Autumn Statement
Unlike the 'Mini Budget' in September, the 2022 Autumn Statement (see here for the full document) contained few surprises with regard to new tax measures, most of which had been pre-announced. We all knew that plugging the black hole in public finances would have to be Chancellor Jeremy Hunt's priority, in order to preserve market stability.
Still, the Chancellor tried hard to focus on the positives and, energy windfall taxes aside, avoid references to 'tax increases'. Freezing and reducing thresholds will of course result in de facto tax increases. And taking the measures announced at the Autumn Statement together with the previous U-turns on the 'Mini Budget', the increase to the nation's tax burden is eye-watering and has been reported to result in the highest total tax burden for the last 70 years. As confirmed by the Treasury, the tax rises announced today will amount to £25 billion by 2027/28.
While the changes to income tax thresholds had been expected, the drastic reductions to the annual exempt amount for capital gains tax came as a surprise. This measure is meant to raise £440 million by 2027/28, but will surely also result in significant administrative costs from processing the additional tax returns that will need to be filed. Raising the relatively low rates of capital gains tax to be more in line with income tax rates would have been a more obvious choice for increasing the tax take from capital gains.
The Autumn Statement made no reference to crypto, despite the consultation on the taxation of decentralised finance (involving the lending and staking of cryptoassets) having concluded on 31 August 2022. As reforming that area of taxation is very much needed, we must hope that this will resume at the 2023 Spring Budget at the latest – and that the recent upheaval around FTX will not dampen the Government's previous enthusiasm to make the UK an attractive place for crypto.
Large corporations and multi-national groups will take note of the Government's commitment to implement the globally agreed G20-OECD Pillar 2 framework in the UK (for accounting periods starting on or after 31 December 2023), following a technical consultation of the draft legislation previously published. The implementation of Pillar 2 in the UK and elsewhere will be an impressive piece of international cooperation on taxation, which will force multi-national groups to coordinate compliance across all relevant jurisdictions.
Set out below is a summary of tax measures announced or confirmed yesterday that we believe will matter most to our clients.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
