{"id":109,"date":"2022-11-17T10:23:08","date_gmt":"2022-11-17T10:23:08","guid":{"rendered":"http:\/\/www.wealthatwork.co.uk\/btnew\/?p=109"},"modified":"2023-01-23T10:24:05","modified_gmt":"2023-01-23T10:24:05","slug":"autumn-statement-2022","status":"publish","type":"post","link":"https:\/\/www2.wealthatwork.co.uk\/bt\/2022\/11\/17\/autumn-statement-2022\/","title":{"rendered":"Autumn statement 2022."},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”110″ img_size=”full”][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n

\n
\n

Personal allowance, tax rates and tax bands<\/strong><\/p>\n

The Chancellor Jeremy Hunt has today delivered his Autumn Statement setting out details of his proposed tax rises and spending cuts to raise \u00a355bn to support the UK\u2019s public finances.<\/p>\n

Prime Minister Rishi Sunak said the Statement would \u201cput our public finances on a sustainable trajectory\u201d after the market turmoil that followed Liz Truss\u2019s Mini Budget in September, which preceded her and former chancellor Kwasi Kwarteng\u2019s resignation.<\/p>\n

Despite the rumours, the Chancellor is keeping with the Conservative 2019 manifesto pledge not to raise the rates of income tax but instead has opted to increase taxes through \u2018stealth\u2019.\u00a0 In a practice known as \u2018fiscal drag\u2019, this involves freezing the thresholds at which people start paying different rates of tax.\u00a0 Because of inflation and pay increases, people end up paying more tax because more of their income starts to fall within higher tax bands.<\/p>\n

Threshold freezes<\/strong><\/p>\n

When Rishi Sunak was chancellor, he introduced a four-year freeze on the personal allowance, the level above which people start paying income tax, at \u00a312,570 from April 2022 until 2025\/26.\u00a0 The threshold for higher-rate income tax in England, Wales and Northern Ireland, when people start paying 40% instead of the standard 20% rate, was frozen at \u00a350,270 over the same period. \u00a0The higher rate was also frozen at \u00a3150,000.<\/p>\n

This freeze has now been extended by two years to 2027\/28 which will mean many more people will be dragged into higher income tax bands.<\/p>\n

Also, in a complete U-turn on Kwasi Kwarteng\u2019s plan to scrap the Additional Rate of income tax, Jeremy Hunt has now reduced the threshold for the highest 45p rate from \u00a3150,000 to \u00a3125,140.<\/p>\n

Set out below are the planned tax rates and thresholds for England, Wales and Northern Ireland from 2023\/24 which look set to be held at these levels until April 2028:<\/p>\n<\/div>\n<\/div>\n

\n
\n
\n
\n
\n
\n
\"Chart1_v1\"<\/div>\n<\/figure>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
<\/div>\n<\/div>\n
\n
\n

Inheritance tax<\/strong><\/p>\n

Mr Hunt has also extended the inheritance tax (IHT) freeze for another two years leaving the nil rate band at \u00a3325,000 and the residence nil rate band (RNRB) at \u00a3175,000.<\/p>\n

Married couples can pool their IHT allowances, meaning that around \u00a31m can be passed to the next generation if a property is involved in the transfer.<\/p>\n

Dividend tax allowance<\/strong><\/p>\n

You only have to pay tax if your dividends exceed the dividend tax allowance in the tax year which is presently \u00a32,000. \u00a0However, you don\u2019t pay tax on dividends from shares in an ISA.<\/p>\n

The dividend allowance will be cut from \u00a32,000 to \u00a31,000 next year and then to \u00a3500 from April 2024.<\/p>\n

The tax you pay depends on your income band \u2013 please note, you must add your dividend income to any other taxable income to determine the rate of tax you will pay.<\/p>\n<\/div>\n<\/div>\n

\n
\n
\n
\n
\n
\n
\"Chart<\/div>\n<\/figure>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
<\/div>\n<\/div>\n
\n
\n

The reduction in the allowance to \u00a31,000 will mean basic rate taxpayers will end up paying \u00a387.50 more in tax, higher rate taxpayers will pay \u00a3337.50 more, and additional rate taxpayers will pay \u00a3393.50 more.<\/p>\n

Capital Gains Tax (CGT)<\/strong><\/p>\n

Mr Hunt announced the Annual Exempt Amount for capital gains tax will be cut from \u00a312,300 to \u00a36,000 next year and then to \u00a33,000 from April 2024.<\/p>\n

Above this, CGT will continue to be paid at 10% (18% for second properties or buy to let) if the chargeable gain fell within an individual\u2019s basic rate band. Any gain that is above an individual\u2019s basic rate band will be charged at 20% (28% for second properties or buy to let).<\/p>\n

State Pension and the triple lock<\/strong><\/p>\n

The triple lock, where pensions rise by the higher of 2.5%, inflation or average earnings was suspended last year and was widely rumoured to be suspended once again.<\/p>\n

However, in a surprise announcement, the Chancellor has reinstated the triple lock and therefore the State Pension will now rise in line with inflation.<\/p>\n

This will be welcome news for many pensioners with the State Pension set to rise by 10.1% from April 2023.<\/p>\n<\/div>\n<\/div>\n

[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n <\/div> ","protected":false},"excerpt":{"rendered":"

The Chancellor Jeremy Hunt has today delivered his Autumn Statement setting out details of his proposed tax rises and spending cuts to raise \u00a355bn to support the UK\u2019s public finances.<\/p>\n","protected":false},"author":1,"featured_media":110,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/www2.wealthatwork.co.uk\/bt\/wp-json\/wp\/v2\/posts\/109"}],"collection":[{"href":"https:\/\/www2.wealthatwork.co.uk\/bt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www2.wealthatwork.co.uk\/bt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/bt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/bt\/wp-json\/wp\/v2\/comments?post=109"}],"version-history":[{"count":1,"href":"https:\/\/www2.wealthatwork.co.uk\/bt\/wp-json\/wp\/v2\/posts\/109\/revisions"}],"predecessor-version":[{"id":111,"href":"https:\/\/www2.wealthatwork.co.uk\/bt\/wp-json\/wp\/v2\/posts\/109\/revisions\/111"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/bt\/wp-json\/wp\/v2\/media\/110"}],"wp:attachment":[{"href":"https:\/\/www2.wealthatwork.co.uk\/bt\/wp-json\/wp\/v2\/media?parent=109"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/bt\/wp-json\/wp\/v2\/categories?post=109"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/bt\/wp-json\/wp\/v2\/tags?post=109"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}