Autumn Statement 2022: What You Need to Know
Today saw the new Chancellor, Jeremy Hunt, deliver his first Autumn Statement at the House of Commons. If you missed it or there was simply too much information to digest, we’ve put together the key points below.
The UK is officially in a recession
Jeremy Hunt acknowledged that the UK is in a shallow but lengthy recession, with the British economy predicted to shrink by 1.4% next year. This is mainly due to global factors, such as the war in Ukraine. The Chancellor gave reassurance that his economic plan will help to rebuild the economy and reduce debt.
Income tax thresholds
The income tax personal allowance threshold will remain frozen until April 2028 instead of 2026. As a result, as wages rise so too will the proportion of earnings that people pay tax on. In other words, tax bands will remain the same even as people’s pay goes up.
The threshold for when the highest earners start paying the top rate of income tax will be brought down from £150,000 to £125,140. This means that those earning £150,000 or more will pay just over £1,200 more a year in tax.
Energy bill support
The current energy support plan will remain in place, which runs up to March 2023. After that there will be an extension of support, although it won’t be as generous (further details are yet to be shared). Meanwhile, energy bills will still go up in April 2023.
As an example of how this may affect you, a household using a typical amount of gas and electricity will pay £3,000 annually (up from £2,500) as the Energy Price Guarantee rises. However, without the Government’s support, experts say the figure could have hit £3,700.
Additional support will be given to people on means-tested benefits (£900 of support), pensioner households (£300) and those on disability benefits (£150).
As for energy companies, they will pay an increased windfall tax of 35%, up from the 25% already levied on their profits.
Pensions to rise
The state pension, benefits and tax credits will rise by 10.1% in April 2023, which corresponds with September’s inflation rate.
Living Wage increase
From April 2023, the National Living Wage for people aged over 23 will increase from £9.50 an hour to £10.42.
We can save you money through tax advice
If you’d like to have a chat about what these changes could mean for you and your business, as well as access tailored advice on how to reduce your tax bills, please call our Yorkshire office on 01482 235575, our London office on 0207 885 0605 or fill in the contact form below.
Tagged as: Government Updates
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