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63 About this deal
Includes reinstating plans to set the Bank Corporation Tax Surcharge rate at 3% from April 2023 and the Diverted Profits Tax rate at 31% from April 2023. To keep spending focused on the government’s priorities and help manage pressures from higher inflation, government departments will continue to identify efficiency savings in day-to-day budgets. To support departments to do this, the government is launching an Efficiency and Savings Review. This will include reprioritising spending away from lower-value and low-priority programmes, and reviewing the effectiveness of public bodies. VED on Electric Vehicles (VED) - From April 2025, electric cars, vans and motorcycles will begin to pay VED in the same way as petrol and diesel vehicles. This will ensure that all road users begin to pay a fair tax contribution as the take up of electric vehicles continues to accelerate. The government will legislate for this measure in Autumn Finance Bill 2022. This means: The government has committed to return to spending 0.7% of Gross National Income (GNI) on Official Developmental Assistance (ODA) when, on a sustainable basis, the government is not borrowing for day-to-day spending and underlying debt is falling. In accordance with the International Development (Official Development Assistance Target) Act 2015, the government will continue to review and confirm each year whether a return to spending 0.7% of GNI on ODA is possible against the latest fiscal forecast with spending assumed at around 0.5% of GNI until then.
Fiscal policy decisions will be guided by updated fiscal rules, which require public sector net debt (excluding the Bank of England) to be falling as a percentage of GDP and public sector net borrowing to be below 3% of GDP by the fifth year of the rolling forecast.
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Memo: Total Capital DEL excluding ringfenced COVID-19, energy support, and intragovernmental leases(3) In the labour market, unemployment was 3.6% in Q3, close to its lowest rate in 50 years. At the same time the economic recovery from the pandemic has pushed the total number of vacancies in the economy above the total number of unemployed people for the first time on record. Working age inactivity remains high, with 630,000 more people inactive compared to pre-pandemic levels. Hiring difficulties are contributing to strong nominal wage growth of 6.0% (including bonuses) in Q3. [footnote 39] keeping the UK’s headline Corporation Tax Rate internationally competitive at 25% – the lowest in the G7 – and protecting 70% of trading companies at 19% with the Small Profit Rate appropriate percentages for electric and ultra-low emission cars emitting less than 75g of CO2 per kilometre will increase by 1 percentage point in 2025-26; a further 1% in 2026-27 and a further 1% in 2027-28 up to a maximum appropriate percentage of 5% for electric cars and 21% for ultra-low emission cars
Transfer pricing documentation: Master File / Local File - From April 2023, large multinational businesses operating in the UK will be required to keep and retain transfer pricing documentation in a prescribed and standardised format, set out in the OECD’s Transfer Pricing Guidelines (Master File and Local File). This will give businesses certainty on the appropriate documentation they need to keep and enable HM Revenue and Customs (HMRC) to effectively identify risks and conduct transfer pricing investigations more efficiently. This will be legislated for in Spring Finance Bill 2023. HMRC will continue to consult on a Summary Audit Trail which is a questionnaire that businesses would be required to complete that covers the main steps undertaken in preparing the Local File. GDP first quarterly estimate, UK:July to September 2022, Office for National Statistics, November 2022. ↩
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Average weekly earnings, adjusting for consumer price inflation, Average weekly earnings in Great Britain:November 2022, Office for National Statistics, November 2022. ↩ International comparisons of GDP during the coronavirus (COVID-19) pandemic, Office for National Statistics, February 2021. ↩ NHS workforce plan - The government is publishing a comprehensive NHS workforce plan, including independently verified workforce forecasts, next year. This will include measures to make the best use of training to get doctors, nurses and allied health professionals into the workforce, increase workforce productivity and retention.
Introduce an Income Inclusion Rule (IIR) which will require large UK headquartered multinational groups to pay a top-up tax where their foreign operations have an effective tax rate of less than 15% The government will also redouble its commitment to support schools, enabling school leaders to continue investing in the areas that positively impact educational attainment. The government will increase per pupil funding committed to at Spending Review 2021 in real terms, helping schools to continue to deliver a high-quality education for children and young people.A fair tax system also ensures that individuals doing similar work pay a similar amount of tax, and that those with unearned income also contribute. The Autumn Statement reduces the generosity of the Dividend Allowance and the Capital Gains Tax Annual Exempt Amount. The Personal Allowance will generally be available in addition to the reduced Dividend Allowance and Capital Gains Tax Annual Exempt Amount. Capital DEL that does not form part of Public Sector Gross Investment in Capital DEL, including Financial Transactions in Capital DEL, intragovernmental leases, and Scottish Government capital. Going forward, the fairest way to restore the public finances is to ask everyone to contribute a little, with those on the highest incomes and those making the highest profits paying a larger share.
Contingent liabilities which can only be described annually, as they are ongoing risks without a fixed expiry date. By the final year of the forecast, the total fiscal consolidation announced since the Growth Plan is 51% tax and 49% spending, including the measures announced in the Autumn Statement and maintaining the basic rate of income tax (see footnote 10).figures reflect outturn in PESA, adjusted for provisional estimates of core spending. For devolved administrations, figures represent the Barnett consequentials of departmental COVID-19 funding less the element they carried forward from 2021-22 into 2022-23. Putin’s illegal invasion of Ukraine and interference in global energy markets has exacerbated these issues. Limits on Russian natural gas supply to Europe, including the closure of Nord Stream 1 (the primary pipeline to Europe), have put significant upward pressure on European and UK natural gas prices. As a result, the prices of gas and electricity have risen to eight times their historic average. a Whilst businesses have their part to play in returning the public finances to a sustainable path, the government is committed to supporting small businesses and the high street. 70% of actively trading companies will not see an increase in the rate of Corporation Tax they pay due to the Small Profits Rate, and 40% of employers will not be affected by decisions on the threshold for employer NICs due to the Employment Allowance. [footnote 19] It is fair that the largest employers pay the most. OECD Pillar 2 - Following consultation, the government will legislate to implement the globally agreed G20-OECD Inclusive Framework Pillar 2 framework in the UK. For accounting periods beginning on or after 31 December 2023 the government will:
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