Autumn Statement and Finance Bill
Autumn Finance Bill 2022 was published on 22 November 2022.
Autumn Finance Bill 2022 has been published.
The Chancellor gave his Autumn Statement on 17 November 2022 and then, a few days later, on 22 November, Autumn Finance Bill 2022 was published. This is the first of two Finance Bills that will be used to enact the majority of the Autumn Statement announcements. A further Finance Bill, Spring Finance Bill 2023, will be published after the Spring Budget. Autumn Finance Bill 2022 is fairly brief by normal standards and predominantly includes legislation for the more straightforward of the Chancellor’s announcements relating to rate and threshold changes. The Bill’s second reading is scheduled to take place on 28 November 2022, following which the Committee of the whole House and all other remaining stages in the House of Commons are expected to take place on 30 November 2022.
Our commentary on the Autumn Statement, including a summary of the Chancellor’s key announcements, can be found on our dedicated Autumn Statement 2022 webpage. You can also read Tim Sarson, Head of Tax Policy, KPMG in the UK’s reflections in his recent LinkedIn blog, ‘A very Autumnal Statement’.
In addition to our written commentary, you can catch up on our LinkedIn Live, where we set out our immediate reactions to the Chancellor’s Statement, as well as our Autumn Statement webinar where we provided a more considered reaction.
The key pieces of tax legislation included in Autumn Finance Bill 2022 are summarised below:
Energy Profits Levy
In the Autumn Statement, the Chancellor announced a new temporary Electricity Generator Levy (EGL) as well as changes to the existing Energy Profits Levy (EPL), including a 10 percent rise in the EPL rate to 35 percent from 1 January 2023. A summary of these measures can be found in our recent article. The majority of the changes to the EPL are included in Autumn Finance Bill 2022 however, legislation for the new EGL, which will apply from 1 January 2023 to 31 March 2028, is not. Draft EGL legislation is expected to be published in mid-December for inclusion in Spring Finance Bill 2023.
Changes to the rates of research and development tax reliefs
The Chancellor announced changes to rebalance research and development (R&D) tax reliefs in the Autumn Statement. Autumn Finance Bill 2022 includes legislation to implement the reduction of benefits available under the small and medium sized enterprise regime and increase of the benefit available under the large company or R&D Expenditure Credit regime. More on these changes can be found in our article on the Chancellor’s R&D tax rate changes.
Measures impacting individuals
In our recent article ‘No tax rate rises for individuals, but most feel the impact of fiscal drag’ we set out the Chancellor’s key announcements at the Autumn Statement for individuals. The measures included in Autumn Finance Bill 2022 for individuals include the freezing of the income tax personal allowance and basic rate limit, the reduction of the income tax additional rate threshold, the continued freezing of the inheritance tax nil rate band and residence nil rate band, the reduction of the annual dividend allowance and the reduction of the capital gains tax annual exempt amount. You can also read further commentary on the impact of the Autumn Statement for individuals in a recent LinkedIn blog post from Jo Bateson, Family Office & Private Client Tax Partner, KPMG in the UK.
Other measures in Autumn Finance Bill 2022 include:
- The introduction of vehicle excise duty for zero emission cars, vans and motorcycles; and
- On company car taxation, the increase to the appropriate percentages for electric and ultra-low emission cars.
From a corporate tax perspective, the banking surcharge and diverted profits tax rates from 1 April 2023 were confirmed in the Autumn Statement, as set out in our recent article. However, as these changes have already been enacted in Finance Act 2022 and Finance Act 2021 respectively, there is no need for further legislation in this Finance Bill.