Employer NICs

The level at which employers start to pay employer NICs for their employees will remain at the current £9,100 until April 2028. The employment allowance will stay at £5,000.

Value added tax (VAT)

The VAT registration and deregistration thresholds will stay at their current levels of £85,000 and £83,000 respectively for a further two years from 1 April 2024.

Business rates

Business rate bills in England will be updated from 1 April 2023 to reflect property values on 1 April 2021. Transitional relief over the next five years will support businesses as they move to their new bills.

Business rates multipliers will be frozen in 2023/24 at 49.9p and 51.2p, avoiding potential increases to 52.9p and 54.2p.

Support for eligible retail, hospitality and leisure businesses will be extended and increased from 50% to 75% business rates relief up to £110,000 per business in 2023/24.

Increases in the bills will be capped at £600 a year from 1 April 2023 for the smallest businesses that lose eligibility or see reductions in the supporting small business scheme or rural rate relief. The improvement relief announced in the Autumn Budget 2021 will now be introduced from April 2024 and will be available until 2028. The relief is aimed at ensuring that ratepayers do not see an increase in their rates for 12 months as a result of making qualifying improvements to a property they occupy.

Online sales tax (OST)

Following consultation, the government has decided not to introduce an OST, an idea put forward as an equivalent to business rates for online businesses.

Energy bill relief scheme (EBRS)

The government’s review of the EBRS, which offers support to non-domestic energy consumers currently up to March 2023, will be published by 31 December 2022. The government recognises that some businesses may need support beyond March 2023, but such support will be significantly lower and targeted.

Research and development (R&D) tax reliefs

For R&D expenditure after 31 March 2023:

the R&D expenditure credit rate will increase from 13% to 20%;

the small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86%; and

the SME credit rate will decrease from 14.5% to 10%.

As announced in the Autumn Budget 2021, qualifying expenditure will be expanded to include data and cloud costs and support will be focused on innovation in the UK. The government will consult on the design of a single R&D tax relief scheme for all businesses.

Creative industry tax reliefs

The government will consult on proposals to incentivise further the production of culturally British content and to support the growth of the audio-visual sectors.

National living wage (NLW) and national minimum wage (NMW)

The government has accepted the recommendation of the Low Pay Commission to increase the NLW for individuals aged 23 and over by 9.7% to £10.42 an hour from 1 April 2023. NMW rates for younger workers and apprentices will be increased by similar percentages.

First-year allowance for electric vehicle charge points

The 100% first-year allowance for electric vehicle charge points will be extended to 31 March 2025 for corporation tax and 5 April 2025 for income tax.

Tax conditionality: licensing in Scotland and Northern Ireland

The requirement to make the renewal of certain licences in Scotland and Northern Ireland conditional on applicants completing checks to confirm they are appropriately registered for tax will now come into force for licence renewals from October 2023 rather than April 2023.

Investment zones

The government will refocus the investment zones programme to create a limited number of high potential clusters, working with local stakeholders, to be announced in the coming months. Existing expressions of interest will not be taken forward.

Tariff suspensions

Tariffs on over 100 imported goods will be removed for two years to help reduce costs for UK producers.

EU regulations

By the end of next year, the government will decide and announce changes to EU regulations in the UK’s growth industries: digital technology, life sciences, green industries, financial services and advanced manufacturing.

Solvency II

In its consultation response the government said it would introduce a “simpler, clearer and much more tailored regime”. The required risk margin would be reduced significantly, with a 65% cut for long term life insurance business.

Bank corporation tax (CT) surcharge

The proposed changes to the bank CT surcharge will go ahead, following the decision to proceed with the CT main rate increase to 25% from April 2023. This means that banks will be charged an additional 3% on their profits above £100 million.

Diverted profits tax

The rate of diverted profits tax (on profits diverted out of the UK) will increase from 25% to 31% from April 2023, maintaining a six percentage points differential above CT.

Transfer pricing

Large multinational businesses operating in the UK will have to keep and retain transfer pricing documentation in a prescribed and standardised format set out by the OECD. This will help HMRC identify risks and conduct transfer pricing investigations more efficiently.

Windfall taxes

The energy profits levy will rise from 25% to 35% from 1 January 2023. The investment allowance will be reduced to 29% for all investment expenditure other than on decarbonisation. A temporary electricity generator levy of 45% will be charged on ‘extraordinary returns’ from low-carbon UK electricity generation.