2022 Autumn Statement

Today (17th November 2022) the Chancellor delivered his 2022 Autumn Statement. In it, he announced significant changes to taxes and allowances. Let’s take a look at some of the main points.

2022 Autumn Statement for Individuals

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

Income taxes

The top 45% additional rate of income tax will now be paid on earnings over £125,140, instead of £150,000
The Income tax personal allowance and higher rate thresholds will be frozen for a further two years, until April 2028, and:
The main National Insurance thresholds will also be frozen for a further two years, until April 2028
The tax free dividend allowance will be reduced to:
- £1,000 in 2023-24, and then;
- to £500 in 2024-25.

Inheritance tax

Inheritance tax thresholds will be frozen for a further two years, until April 2028
The Inheritance Tax nil-rate band – the amount that can be passed on before IHT is due at a rate of 40% – has been further frozen at £325,000 until April 2028.

Motoring

Electric vehicles will no longer be exempt from vehicle excise duty from 2025

Wages

The “national living wage” will rise by 9.7% next year to £10.42 an hour.

Benefits

State pension and most state benefits – including universal credit – WILL rise by 10.1% next April
The benefit cap will be increased with inflation next year.
The pensions triple lock will be kept.

Cost of Living Support

The chancellor says households and businesses WILL be provided with support next year as follows:

The government’s energy price guarantee will be kept for a further 12 months at an average of £3,000 for a typical household, up from £2,500 at present.
new one-off payments of £900 to households on means-tested benefits,
£300 to pensioner households, and
£150 for individuals on disability benefit.

Cost of living support Factsheet – GOV.UK (www.gov.uk)

2022 Autumn Statement for Businesses

The chancellor says the government will soften a blow for businesses on business rates with an almost £14bn tax cut on business rates, this will benefit about 700,000 businesses.

Corporation tax rate

The government will go ahead with the planned increase to Corporation Tax. This will rise to between a minimum of 20% to a maximum of 25% from April 2023, from the current at 19% for all companies.