The Autumn Statement: What has been announced?
Our priorities are stability, growth & public services
The new Chancellor, Jeremy Hunt has made his Autumn statement and acknowledged that the UK is in recession and things will get worse before they get better. He has said that "We are not alone in facing these problems," but the UK is responding to global problems with British solutions, a balanced path towards stability, however it means it taking difficult decisions.
This article outlines a summary of the measures announced.
Personal Tax Announcements:
- The threshold for when the highest earners start paying the top rate of tax will be brought down from £150,000 to £125,140 from 6 April 2023
- Income tax personal allowance and higher rate thresholds will be frozen until 2028 the Chancellor announces. Freezing the thresholds means that tax bands will stay the same, even as people’s pay goes up. So as wages rise, the proportion of earnings that we pay tax on will increase, and more people will move into higher tax brackets. The thresholds were already frozen until 2026.
- National Insurance and inheritance tax thresholds are being frozen until April 2028
- Capital gains tax allowance is being cut from £12,300 to £6,000 from April 2023 and £3,000 from April 2024.
- Dividend allowance (how much you can earn from dividends before paying tax) is being cut - from £2,000 to £1,000 in April 2023 and £500 in 2024.
- From April 2025 electric vehicles will no longer be exempt from Vehicle Excise Duty
- The changes to stamp duty land tax (SDLT) in England and NI made in September will only last until 2025. That means: For first time buyers, (SDLT) is payable above £425k (when the property is worth £625k or less). This will drop back to £300k (on properties £500k and under.
- For existing homeowners, this means stamp duty land tax will be payable above £250k. This will drop back to £125k in 2025.
Business Tax Announcements
- From January 1st until March 2028 the Energy Profits Levy will increase from 25% to 35%
- From January 1st, there will be a new temporary 45% levy on electricity generators
- From 31st December 2023 introduction of OECD’s global tax reforms to make sure multinational corporations pay the right tax in the countries they operate
- £13.6 billion package of business rates support over next 5 years
- For the remaining two years of this Spending Review increases in departmental budgets will be protected
- £280 million investment in the DWP to crack down of fraud, error & debt across the benefit system
- Commitment to continue to maintain the defence budget at least 2% of GDP to be consistent with the NATO commitment
- in 2023 and 2024 the government will invest an extra £2.3bn in schools next year and the year after
- The UK cannot yet return to the commitment to spend 0.7 per cent of GDP on international aid.
- £8bn investment in health and social care in 2024-25 (NHS to receive extra £3.3billion in each of next two years)
- Devolved administrations will receive £3.4bn over the next two years
Further measures & policy announcements:
- Pension credit and triple lock protected, the State Pension and Pension Credit will be uprates in line with the rate of inflation (10.1%) from April 2023
- Energy efficiency taskforce established to save people money on bills with £6bn of new funding
- £600bn in capital investment for new infrastructure such as roads, trainlines, and communities over the next 5 years
- Reforming tax credits announced
- Under the Energy Price Guarantee cost of living payments announced for next fiscal year. Households on means-tested benefits £900, pensioner households to receive £300, individuals on disability benefits to receive £150
- Social housing rent increases to be capped below inflation
- National living wage is being raised to £10.42 per hour
- Working age benefits to rise in line with inflation of 10.1% from April 2023
To read the full statement follow the link below:
If you have any questions about what these announcements may mean for you or your business, please get in touch with your Swindells partner who will be able to advise you further.
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