What Does the Autumn Statement Mean for Your Income?
Following on from the Chancellor’s controversial Autumn Statement last week, Fintuity is pleased to present our second article dedicated to assessing the Autumn Statement and what it means for you.
Arguably the most important piece of the announcement relates to the rates of taxation and what this means for your levels of disposable income.
Plugging the Economic Black Hole – Higher Taxation & Reduced Government Expenditure
Following Liz Truss’ short lived administration, the arrival of Chancellor Jeremy Hunt has brought to sharp focus the economic deficit that the UK is facing. With the pandemic, war in Ukraine and global squeeze on the cost-of-living, the Chancellor has embarked on a path of ‘tough love’ to balance the books with an announcement of £55 billion in tax rises.
In short, the government of the day (for now) have opted to significantly reduce outgoings whilst increasing taxes but as we have seen, government policy can be a fickle thing and will last only as long as the leader itself. Should a general election take place in the coming months and years, we would predict a fairly major shift in taxation policy but for now this is the course that we must seemingly take.
Higher Levels of Taxation Expected
As stated last week, the latest developments are as stated below:
- All state pension payments and means assessed support / disability benefits will rise in line with inflation by 10.1%
- The income tax personal allowance and higher rate thresholds will be frozen until 2028 – an increase of two years
- Inheritance tax thresholds will be frozen until April 2028 meaning that the rate if IHT will remain unchanged at 40% of estates valued at over £325,000
- The national insurance threshold will also be frozen by another two years to 2028 – those earning more that £242 a week will continue to pay 12% of gross income
- All local councils in England will be able to increase council tax from the existing rate of 3% to 5% without a local vote – meaning those in Band D will be paying £2000+ for the first time
- Excluding Scotland, the top added rate of income tax of 45% will be paid on earning over £125,140, down from £150,000 – this is expected to equate to around £12,000 extra for all
- Dividend thresholds will be reduced from £2000 to £1000 in April 2023 and will be reduced to £500 the following year
- From April of 2023, the national minimum wage for those over twenty-three will rise from £9.50 to 10.42
Tax Rates Until April 2023
The tax thresholds will remain unchanged between now and April of next year and will remain as they currently stand.
- Personal allowance – Up to £12,570 Tax – 0 per cent
- Basic rate – £12,571 to £50,270. Tax – 20 per cent
- Higher rate – £50,271 to £150,000. Tax – 40 per cent
- Additional rate – over £150,000. Tax – 45 per cent
Fintuity – Your Financial Partner in a Time of Crisis
Information is key to overcoming a crisis and Fintuity is able to assist you in a number of ways by helping you plan for your financial future.
As the cost-of-living crisis continues to increase, we can assist you in a number of ways including a cutting-edge Virtual Adviser, a library of up-to-date financial advice, a complimentary IFA meeting as well as a searchable blog with hundreds of articles and a complimentary financial health check to allow you to maximise your finances. The Fintuity team can help supporting you with advice on:
- General financial and budgeting advice
- Cost of living workshops
The best place to start however is with a financial health check to allow us to work out how best to help you. Knowledge is power – receive your complimentary financial report with our Virtual Adviser or Book your Initial Consultation today to speak to a member of our team.
Introducing Fintuity – The UK’s Digital IFA!
Fintuity is like a traditional IFA, only we are an online adviser which means we can offer a more cost effective, time-sensitive and flexible service! We offer the full range of IFA services via our digital platform, at below industry rates and at your convenience. Please do not hesitate to get in touch to see how we can help you.
For all enquiries please visit www.fintuity.com or contact Fintuity’s Communications Manager, Nic Cobb at firstname.lastname@example.org.
Please Note: All information included in this article were correct at the time of publishing.