With the increase in the main rate of corporation tax to 25% from 1 April 2023 already announced (and re-confirmed following the reversals of the “Mini-Budget”), we were not expecting much change on the corporation tax front in the Autumn Statement.

Despite other announcements tending towards the removal of some of the tax benefits attributable to electric vehicles, First Year Allowances for electric vehicle charge points has been extended to 31 March 2025. 

Changes to the bank surcharge rate from April 2023 were announced, meaning banks will pay an additional 3% rate on profits in excess of £100m. In addition, changes to the Diverted Profits Tax rate from 25% to 31% from April 2023 were also confirmed, in order to retain the current 6% differential from the main rate of corporation tax. 

The Government will legislate in the Spring Finance Bill 2023 to incorporate the G20 agreed OECD Inclusive Framework Pillar 2 into the UK tax system. This will require large multinational businesses (global turnover in excess of €750m) with UK presence to pay additional top up tax where their UK operations pay an effective tax rate of less than 15%. 

Finally, there was much speculation in the press beforehand about what the Chancellor might do around “windfall taxes”. The Energy Profits Levy will increase by 10% to 35% from 1 January 2023 until 31 March 2028. The levy is now expected to generate £40bn in tax revenues over the next 6 years. In addition, the Chancellor announced a new Electricity Generator Levy, a tax of 45% on “extraordinary” returns exceeding £10m from low carbon UK electricity generation. Again, this levy will apply from 1 January 2023 to 31 March 2028 and is forecast to raise £14bn in tax revenues.

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Read the rest of our Autumn Statement analysis on our Budget Hub, and for more information or to discuss any of the announcements, please don't hesitate to get in touch with me.