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Autumn Statement 2022: Corporate and Business Tax Round-up

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National Insurance thresholds frozen

In line with the freezing of income tax thresholds, most National Insurance thresholds have also been frozen until April 2028.

Annual Tax on Enveloped Dwellings (‘ATED’)

The annual rate of charges for properties impacted by ATED will be uplifted by 10.1% for 2023-24, being the Consumer Prices Index figure for September 2022.

Tax benefits of electric vehicles are squeezed as part of a number of changes to the taxation of vehicles

The Chancellor announced several changes to the taxation of vehicles that will result in additional costs for motorists who are impacted.

Vehicle Exercise Duty (VED) changes for electric vehicles

Currently, electric vehicles do not pay VED, unlike their petrol and diesel counterparts. However, this is set to change from 1 April 2025, as follows:

  • Zero and low emission cars registered between 1 March 2001 and 31 March 2017 that are currently in Band A, will move to Band B (current VED rate £20 per annum)
  • Zero emission cars registered between 1 April 2017 and 31 March 2025 will pay the standard rate of VED (currently £165 per annum)
  • New zero emission cars register on or after 1 April 2025 will pay the lowest VED rate for the first year (currently £10 per annum) but will then pay the standard rate of VED for subsequent years
  • Zero emission vans will pay the same rate of VED as petrol diesel light goods vehicles (currently £290 per annum for most vehicles)
  • Zero emission motorcycles and tricycles will move to the rate for the smallest engine sized petrol counterparts (currently £22 per annum)

The exemption for electric cars from the Expensive Car Supplement, which applies to vehicles which have a list price that exceeds £40,000 for five years, is set to end on 31 March 2025. Electric cars registered after this date will therefore become subject to this supplementary charge. Given that the vast majority of electric cars cost more than £40,000, you may wish to accelerate your purchase to before 1 April 2025. The VED rates for Alternative Fuel Vehicles and hybrids will also be equalised as of 1 April 2025.

Company car and vans tax Rates.

The Chancellor has announced changes to the taxation of company cars and vans that will remain in force until April 2028, being:

  • The percentages for electric and ultra-low emission cars (less than 75g of CO2 per km) will increase by 1 percentage point from the 2025-26 and the following two years up to a maximum appropriate percentage of 5% and 21% for electric and ultra-low emission cars, respectively
  • The rates for all other vehicles will be increased by 1 percentage point in 2025-26 only, up to a maximum appropriate percentage of 37%
  • Car and van fuel benefit charges and the van benefit charge will increase in line with the Consumer Prices Index from 6 April 202

First year capital allowances on electric vehicle chargepoints.

The Spring 2023 Finance Bill will contain provisions to extend the 100% first year capital allowances for electric vehicle chargepoints to 31 March 2025 and 5 April 2025 for corporation tax and income tax purposes, respectively.

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Please do give us a call if you wish to discuss any of the above measures and the impact to your business.

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