Economics

Autumn Statement 2022: key points at a glance for business

Find out what the government’s Autumn Statement could mean for your business.

18 Nov 2022 . 2 min read

In the face of difficult global headwinds, Chancellor Jeremy Hunt unveiled the contents of his fiscal plan, with measures to tackle the cost of living crisis and rebuild the economy.

Picture credit: © Getty Images

Here are the main takeaways for businesses

Electric vehicles will be taxed from 2025

The Office for Budget Responsibility (OBR) has forecast that half of all new vehicles will be electric by 2025. The Chancellor has therefore decided to make the motoring tax system “fairer”. From April 2025, electric vehicles (EVs) will no longer be exempt from vehicle excise duty.

Company car tax rates will remain lower for EVs, and the Treasury will limit rate increases to one percentage point a year for three years from 2025.

Energy-efficiency funding and targets for business premises

The UK has been set a new ambition: by 2030, the Chancellor wants to reduce energy consumption from buildings and industry by 15%. From 2025, there will be new funding of £6bn – which is in addition to the £6.6bn previously announced for investment in energy efficiency.

Increasing innovation, competition and research and development

The government will legislate to give the Digital Markets Unit new powers to challenge monopolies and increase the competitive pressure to innovate.

To further spur competition, the Chancellor is removing import tariffs on over 100 goods used by UK businesses in their production processes, from car seat parts to bicycle frames.

The Chancellor confirmed that he will increase public funding for research and development to £20bn by 2024 –2025 as part of the mission to make the UK a “science superpower”.

Support packages for retail, hospitality and leisure businesses

There will be £13.6bn of support for businesses over the next five years. The support package includes freezing the rates multiplier in 2023/4 and increasing relief for retail, hospitality and leisure businesses to 75% of rates payable.

However, with the relief being capped at £110,000 per business, larger retailers and other sectors will face full business rates bills.

Annual Investment Allowance to remain at £1m

To support businesses to invest and grow, the government is setting the Annual Investment Allowance (AIA) at its highest ever permanent level of £1m from 1 April 2023, rather than it reverting to £200,000 in the next tax year. According to the government, this amounts to full expensing for an estimated 99% of UK businesses, which means those businesses can write off the cost of qualifying plant or machinery investment in one go.

A permanent increase provides businesses with stability and makes tax simpler for any business investing between £200,000 and £1m.

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