The Autumn Statement ‘At a Glance’
With the nation awaking to the full ramifications of the Autumn Statement and the wider state of the national finances, many will be wondering what these decisions will mean for them and their loved ones.
As part of a series of articles over the coming week, Fintuity will be serialising the details of the Autumn Statement and supply detailed analysis of what this could mean for you.
The 2022 Autumn Statement – Higher Taxes & Spending Cuts
It will come as no surprise to many that the Chancellor and his team have decided upon this course of action – the war in Ukraine, soaring energy costs and recession across the world have created a perfect economic storm that has hindered our planned post-pandemic recovery.
With tax rises and billions of pounds of spending cuts the Autumn Statement will undoubtedly mean further hardship for millions of hard-pressed Britons. We will be releasing further and more detailed analysis of the statement over the coming week but here is an overview as to what was announced by the Chancellor yesterday.
The Headline Autumn Statement Headline News
- The income tax and inheritance tax allowances will be frozen until 2028
- Top additional rate of income tax of 45% threshold to be lowered to £125,140
- Mortgage rates forecast to stay at 5% (OBR)
- UK officially in recession and inflation rate predicted to be 9.1% this year with OBR predicting 14% inflation
- The BOE rate is expected to rise to 5% (OBR)
- Household energy price cap to be extended for one year beyond April of 2023 with energy bills capped at £3000 – means assessed households on benefits will receive £900 in support payments next year
- Stamp duty relief to expire in 2025
- Lifetime allowance & money purchase annual allowance is also frozen
- CGT allowances cut to £6150 in 2023 and then £3000 in 2024, and dividend allowances cut to £1000 in 2023 and then £500 in 2024
We see a pincer movement to further squeeze already hard-pressed Britons – with income tax bands frozen until 2028, millions look set to be impacted by implicit tax rises which will impact financial planning. This may mean making the most of your pension and ISA allowances may help offset this potential impact. By freezing the rate of Higher Rates of Tax (HRT), an additional 1.7mn tax payers will now be facing an additional tax of £1700 per annum with additional rate payers paying an extra £1815 as a result of fiscal drag.
As the full details appear of the Autumn Statement in the coming week, we will be issuing a series of ‘Statement Focus’ pieces that will be aimed to help you assess the full implications for your finances.
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Please Note: All information, references and dates included in this article were accurate at the time of publishing.