Amidst the backdrop of an economy in recession and struggling with the consequences of record inflation levels, Chancellor Jeremy Hunt delivered his Autumn Statement today. Clarifying the Government’s economic focus after the confusion following the Mini Budget U-turns, the Chancellor championed the Government’s three economic priorities; stability, growth and public services.
In practical terms, Chancellor Hunt asserted that his Autumn Statement would provide ‘fair solutions’ to help the UK economy recover and grow, despite involving ‘difficult decisions.’ The cost of living crisis was addressed; the Chancellor blamed ‘unprecedented global headwinds’ for the financial upheaval.
This Autumn Statement outlined cuts in higher tax rate thresholds and reduced allowances amongst the measures announced.
Personal Taxes
- The chancellor announced a range of tax threshold freezes; including for income tax and inheritance tax for a further two years, on top of an existing four-year freeze, to April 2028.
- Dividend allowances will be cut. The annual exempt allowance for capital gains tax will also be cut.
- Chancellor Hunt stated the changes still afford more generous allowances than several other leading comparable nations.
- The threshold for the 45p additional rate of tax will be cut from £150,000 to £125,140.
- Electric vehicles will no longer be exempt from vehicle excise duty from 2025.
Business Taxes
- Windfall taxes will raise £14bn, including a new temporary 45% levy on electricity producers.
- The Government will soften the blow for businesses-on-business rates, with an almost £14bn tax cut on business rates — this is estimated to benefit approximately 700,000 businesses.
- The employment allowance will be retained at a higher level of £5,000.
Considering the above announcements, personal tax will be the most affected with revenues increasing across the board.
The Chancellor also addressed the cost of living crisis and further outlined how support was to be provided for the most vulnerable within society, and what funding would be available for critical services such as the NHS.
To cut through all the rhetoric, commentary and media coverage comments, WHA have produced a summary of the Autumn Statement which will hopefully help you navigate what the Chancellor’s announcements mean for you and your business.
You can access this summary by clicking the link below:-
WHA Autumn Statement Summary 2022
As always, the WHA team is happy to help with any questions you might have.
