It feels like a mere few weeks ago that we were writing our last blog about a Chancellor’s announcements (and to be fair, that’s because it was!). After the rather catastrophic previous administration’s ‘Growth Plan’ back in September, on Thursday, the new Chancellor Jeremy Hunt announced his Autumn Statement. And in just 7 weeks, we have pivoted from tax cuts, to tax rises and threshold freezes.
Personal Tax Measures
- From April 2023, the additional rate of tax threshold (above which, individuals pay tax at a rate of 45%) will decrease from £150,000 to £125,140.
n.b. Scotland set their own tax bands- the Scottish Government are expected to announce this on 15th December.
- Existing thresholds for income tax (not including the additional rate mentioned above), inheritance tax and national insurance will remain frozen until 2028. This means that the personal tax free allowance will remain at £12,570 until 2028.
- From April 2023, the dividend tax free allowance will decrease from £2,000 to £1,000, and then from April 2024, will reduce down to £500.
- From April 2023, the capital gains tax free allowance will decrease from £12,300 to £6,000, and then from April 2024, will reduce down to £3,000.
- From April 2023, the National Living Wage will increase from £9.50 to £10.42/hour (employees over 23).
Business Tax Measures
- The VAT registration threshold is to remain frozen at £85,000 until 2026.
- The Employment Allowance for Employers NI will remain at £5,000.
- From April 2023, class 2 NI (national insurance payable on self employment income) will increase to £3.45/week.
- From April 2025, electric vehicles will no longer be exempt from road tax.
- From April 2023, means-tested/disability benefits and the state pension will rise by 10.1% (in line with inflation), with more one-off cost of living payments also due to these cohorts.
- From April 2023, councils will be able to raise council tax by up to 5% (instead of 3%) without a referendum.
- From 2025, recent stamp duty threshold rises made in September will be reversed back to £125,000, and £300,000 for first time buyers.
- From April 2023, the energy price cap will rise from £2,500 to £3,000.
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