Small Business Accountants

Autumn Statement 2022: What it means for you?

The Autumn Statement 2022, delivered by Chancellor Jeremy Hunt on 17 November, introduced sweeping tax changes for individuals and businesses. Key measures included freezing income tax and National Insurance thresholds until April 2028, cutting the dividend tax-free allowance to £1,000 then £500, halving the capital gains tax allowance, confirming Corporation Tax at 25% and raising the National Living Wage to £10.42.

By Jordan Macey MAAT Reviewed by Noor Fiaz Updated 16 Apr 2026 4

Key takeaways

Income tax, National Insurance and inheritance tax thresholds were frozen until April 2028, pulling more earners into higher tax bands through fiscal drag.
The dividend tax-free allowance was cut from £2,000 to £1,000 in April 2023 and then to £500 in April 2024, increasing the tax bill for company directors taking dividends.
Capital gains tax annual exemptions were halved from £12,300 to £6,000 in April 2023, then reduced again to £3,000 in April 2024.
Corporation Tax rose from 19% to 25% for companies with profits over £250,000, while the Annual Investment Allowance was set permanently at £1 million.
The National Living Wage increased from £9.50 to £10.42 per hour from April 2023, and the additional rate income tax threshold dropped from £150,000 to £125,140.

On the 17th of November 2022, the Chancellor, Jeremy Hunt, outlined the changes in the Autumn Statement. He stated that the government plans to tackle the cost of living crisis and rebuild the UK economy. The priorities for this plan are stability, growth and public services. He states the government is “honest about the challenges” and “fair about our solutions”.

This article provides a summary of events outlined by the statement for both individuals and businesses. The earliest changes will come into effect from April 2023.

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Income tax, National Insurance and Inheritance tax

The threshold on the additional rate income tax (45%) is to be lowered in April 2023, meaning the top earners will pay the additional rate of tax on earnings over £125,140 (currently £150,000).

A further two years of a freeze on income tax, personal allowances, higher rate thresholds, NI thresholds and inheritance tax thresholds are scheduled to occur until April 2028; previously being set to be reviewed in April 2026.

National Living Wage

From April 2023, the National Living Wage will increase from £9.50 to £10.42 for those ages 23 and over.

‍Dividend Tax

A reduction in Dividend tax-free allowances is expected next year and in 2024. The tax-free dividend allowance will be reduced from £2,000 to £1,000 in April 2023 and then to £500 in 2024.

Capital Gains Tax

The annual tax-free allowance for capital gains tax will reduce from £12,300 to £6,000 in April 2023 and reduce to £3,000 in April 2024.

Company Cars (Benefit kind)

Company car tax will increase by one percentage point yearly for the next three years from 2025-28.

‍Employers National Insurance

The government plans to maintain the threshold for Employers' National Insurance Contributions at the current level from April 2023 until April 2028.

‍Employers Allowance

Employer allowance is to be retained at a higher level of £5,000.

‍VAT

Jeremy Hunt announced that VAT registration and deregistration thresholds will be maintained at £85,000 for the next two years from the 1st of April 2024.

‍Corporation Tax

The planned increase in Corporation Tax to 25% will still go ahead. The £1 million allowance for annual investment will remain.

‍Investment Allowance

The government plans to set an Annual Investment Allowance at a permanent £1 million from 1st April 2024.

‍IR35

IR35 2017 and 2018 reforms are to be maintained.

‍Energy Bills

The government plans to adjust a typical household's price from £2,500 to £3,000 per year from April 2023 to March 2024.

‍Windfall tax

Windfall tax on the profits of oil and gas companies will increase and be extended until March 2028, beginning on the 1st of January. The tax increase is expected to be up 10% from 25% to 35%.

‍Electricity Generator Levy

The government is introducing a new temporary 45% tax levied on “extraordinary returns” from electricity companies. This will be implemented from the 1st of January 2023 until March 2028.

‍Growth

The Office for Budget Responsibility (OBR) forecasts that this year's growth is expected to be 4.2%, but the economy will shrink by 1.4% in 2023.

Inflation

The OBR has predicted that inflation will be 9.1% this year and 7.4% in 2023.

‍Universal Credit

Means-tested benefits such as universal credit are expected to rise in line with inflation (10.1%).

State Pensions

State pensions are also expected to rise by the same amount.

Debt and spending targets

Jeremey Hunt proposes that government spending will continue to increase every year for the next five years but at a slower rate at 1% a year in real terms.

‍Defence spending

Jeremy Hunt reconfirms the government's commitment to maintaining defence spending at 2% of GDP for the time being.

‍Overseas Aid

Spending on overseas aid will be kept at 0.5% for the next five years, below the 0.7% target.

‍NHS Spending

The Chancellor stated that the NHS would see a £3.3bn increase in each of the next two years.

Frequently asked questions

What were the main tax changes in the Autumn Statement 2022?

The Autumn Statement 2022 froze income tax, National Insurance and inheritance tax thresholds until April 2028, cut the dividend tax-free allowance from £2,000 to £1,000 (then £500 in 2024), reduced the capital gains tax annual exemption from £12,300 to £6,000 (then £3,000 in 2024), confirmed Corporation Tax rising to 25% and lowered the additional rate income tax threshold from £150,000 to £125,140.

How did the Autumn Statement 2022 affect dividend tax allowances?

The tax-free dividend allowance was reduced in two stages. It fell from £2,000 to £1,000 in April 2023 and then to £500 in April 2024. This meant company directors and shareholders receiving dividends above those thresholds paid more in tax. The dividend tax rates themselves stayed the same at 8.75% basic, 33.75% higher and 39.35% additional rate.

What happened to capital gains tax allowances after the Autumn Statement 2022?

The annual capital gains tax exemption was cut from £12,300 to £6,000 from April 2023, and then reduced further to £3,000 from April 2024. This affected anyone selling assets such as shares, property or business interests at a profit. The CGT rates themselves remained unchanged, with basic rate taxpayers paying 10% (18% on residential property) and higher rate taxpayers paying 20% (24% on residential property).

How did the Autumn Statement 2022 change Corporation Tax?

The statement confirmed that Corporation Tax would rise from 19% to 25% from April 2023 for companies with profits above £250,000. Businesses with profits below £50,000 continued to pay the small profits rate of 19%. Those with profits between £50,000 and £250,000 qualified for marginal relief. The Annual Investment Allowance was also fixed permanently at £1 million.

What did the Autumn Statement 2022 mean for income tax thresholds?

Income tax personal allowances and higher rate thresholds were frozen until April 2028, two years longer than originally planned. The personal allowance stayed at £12,570 and the higher rate threshold at £50,270. Additionally, the additional rate threshold was lowered from £150,000 to £125,140 from April 2023, meaning more high earners became liable for the 45% rate.

How did the Autumn Statement 2022 affect the National Living Wage?

The National Living Wage rose from £9.50 to £10.42 per hour from April 2023 for workers aged 23 and over. This represented a 9.7% increase and was designed to help employees cope with the rising cost of living. Employers needed to update their payroll systems and ensure all eligible staff received the higher rate from the start of the new tax year.

What energy bill changes were announced in the Autumn Statement 2022?

The Energy Price Guarantee was adjusted so that a typical household's annual bill would rise from £2,500 to £3,000 from April 2023 to March 2024. The government also increased the windfall tax on oil and gas companies from 25% to 35% and introduced a new 45% Electricity Generator Levy on extraordinary profits from electricity producers, both running until March 2028.

Did the Autumn Statement 2022 change employers' National Insurance or VAT?

Employers' National Insurance thresholds were frozen at their current levels from April 2023 until April 2028, and the Employment Allowance was kept at £5,000. The VAT registration and deregistration thresholds were also maintained at £85,000 from April 2024 for two further years. Neither rate changed, but the frozen thresholds meant more businesses crossed into liability as wages and turnover grew.