Autumn Statement 2022 ~ Key Announcements

Chancellor Jeremy Hunt delivered his Autumn Statement on Thursday 17 November.

The markets and pound were largely unmoved, which wasn’t the case when the previous Chancellor Kwasi Kwarteng delivered mini-budget in September.

The UK Chancellor outlined three priorities of stability, growth and public services as part of his Autumn Statement. The government reduced the income tax additional rate threshold from £150,000 to £125,140, increasing taxes for those on high incomes. Income tax, National Insurance and Inheritance Tax thresholds will be maintained at their current levels for a further two years, to April 2028. The government reduced the Dividend Allowance and Capital Gains Tax Annual Exempt Amount.

Here are Key highlights of Autumn Statement 2022:

Income Tax

• The personal allowance will remain frozen at £12,570, and the threshold at which individuals become liable for the higher rate of 40% will remain at £50,270, in both cases until April 2028.

• The government will decrease the additional rate threshold from £150,000 to £125,140 from 6 April 2023.

Corporation Tax

• The government previously announced that the rate of corporation tax will increase from April 2023 to 25% from the current 19%.

• As a result of corporate tax rate rising to 25% from April 2023, the Bank Corporation Tax Surcharge will reduce from 8% to 3%. This applies to banks profits above £100 million.

Dividends and Capital Gains Tax

• Dividend threshold to lower from £2,000 to £1,000 next year, then to £500 from April 2024.

• The Capital Gains Tax annual exemption amount will be reduced from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024.

Stamp Duty

• The increases to the Stamp Duty Land Tax (SDLT) nil-rate threshold (from £125,000 to £250,000) and the increased nil-rate threshold paid by first-time buyers from £300,000 to £425,000, which came into force on 23 September 2022, remain only until March 2025. After this date the allowances will revert to their previous levels.

Other key highlights

• Inheritance Tax nil-rate bands will remain frozen until April 2028. The nil-rate band is frozen at £325,000, the residence nil-rate at £175,000, and the residence nil-rate band taper will continue to start at £2 million.

• From 1 April 2023, the government will increase the National Living Wage (NLW) by 9.7% to £10.42 an hour, for those aged 23 and over.

• In addition, the government is protecting the most vulnerable in society by increasing benefits in line with inflation, measured by September CPI which is 10.1% this year. As a result of uprating both working age and pension benefits around 19 million families will see their benefit payments increase from April 2023. The benefit cap will also be raised in line with inflation in April 2023, so that more households will benefit from uprating.

Source: https://www.gov.uk/government/publications/autumn-statement-2022-documents/autumn-statement-2022-html

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