Áine O’Hare, Tax Lead Partner and International Business Lead for PwC Northern Ireland, comments on what the Autumn Statement means for businesses and individuals in Northern Ireland. 

There were no big surprises for businesses in today’s announcements in terms of the rate of corporation tax which will increase to 25% from 1 April 2023 as well as the commitment to the implementation of the Pillar 2 legislation. This provides certainty about the direction of travel on tax for the medium to long term.

Business Update

The Chancellor has given large companies a much welcomed bonus by increasing the headline R&D credit rate from 13% to 20% resulting in a change in cash value from 10.5% to 15% (after taking account of the change in corporation tax rate). However this is being more than paid for by a significant reduction in credits available for SMEs where the rate of relief for loss making companies nearly halves from 33% to 18.6%. This rebalancing of rates between the two schemes will result in more than a £1 billion of extra funds for the exchequer. SME companies make up a large proportion of the Northern Ireland market, so the impact of these changes will be felt by many.

Personal tax

The measures announced by the Chancellor will also have a significant impact on individuals in Northern Ireland. Personal tax changes include Income tax, National Insurance and Inheritance Tax thresholds all being maintained at their current levels until April 2028. The reductions in annual exemptions for Capital Gains and Dividend Tax will bring more people within the scope vof these taxes and increase the tax return compliance burden for both individuals and potentially HMRC. The Autumn Statement reduces the income tax additional rate threshold from £150,000 to £125,140 from 6 April 2023, which means people will pay an effective tax rate of 60% on income between £100,000 and £125,140, and 45% on income above this.

The measures on Stamp Duty Land Tax announced in September 2022, will now be a temporary reduction that will remain in place until 31 March 2025 to support the housing market.

For more detail, please contact Áine O'Hare by email at aine.h.ohare@pwc.com