The Chancellor, Jeremy Hunt, delivered his Autumn Statement on Thursday 17 November 2022. He was faced with a challenging economic backdrop to his first major set piece, grappling with a combination of over 11% inflation, an official recession and the need to calm markets and re-establish the UK’s financial credibility following the turmoil of September’s ‘mini-Budget’. EBcam’s Summary of the Autumn statement 2022 is available in the Client Area on our website.
We were pleased that pension tax relief and annual pension allowances were left unchanged and that although tax on electric vehicles is increasing these remain an attractive salary sacrifice employee benefit.
Mr Hunt’s position was not an enviable one. His long-term focus, he stated, is on stability, growth and public services. Most of the attention, however, centres on the balance he attempted to strike between tax increases (real and stealth) and spending cuts to fill the over £50 billion hole he has inherited.
The key announcements covered a wide range of ground:
- The main income tax allowances and thresholds, the main national insurance thresholds and the IHT nil rate bands will remain frozen at their current levels for an extra two years until April 2028.
- The threshold for the 45% additional rate of income tax will reduce from £150,000 to £125,140 from April 2023.
- The dividend allowance will be halved from April 2023 and again the following year.
- The capital gains annual exempt amount will be cut from £12,300 to £6,000 for 2023/24 and halved to £3,000 from April 2024.
- From April 2023 the energy price guarantee will be adjusted upwards, costing typical households an additional £500 from the current position.
- State pensions will increase under the ‘triple lock’ in line with the 10.1% September CPI inflation figure, alongside universal credit and certain other benefits.
- Business rates will be updated with additional targeted support over the next five years.
- Electric cars will come into the tax orbit for road tax from April 2025.
The full Budget is still due in the Spring. If you have any employee benefit, pension or financial planning needs or questions, in particular about how the Autumn Statement may affect your business or employees, please get in touch.