This page will receive live updates on Thursday as the Autumn Statement is delivered to the House of Commons.
deVere Group’s Technical Department will be covering and analysing the most important announcements from the UK government’s Autumn Statement, including potential changes to inheritance tax, capital gains tax, national insurance, the triple lock system.
The Autumn statement will be delivered to the House of Commons on Thursday by Chancellor Jeremy Hunt. The widespread expectation is that Hunt will reverse the majority of changes implemented by his predecessor, Kwasi Kwarteng.
The 2022 Autumn statement comes just weeks after the government delivered its last major financial blueprint.
On September 23rd, Kwasi Kwarteng delivered a Ministerial Statement to the House of Commons entitled “The Growth Plan”; this was widely referred to as the “mini-budget”. The budget was the first and last of Prime Minister Lizz Truss’ short premiership.
Kwarteng’s mini-budget, which contained several tax cuts aimed at stimulating the economy, was seen across the political world as gross economic mismanagement. Truss’ government attempted to revive ‘trickle-down economics’ a style of governing not seen since the days of Thatcher and Reagan.
Jeremy Hunt has outlined three core priorities for the governments budget.
Stability, growth and public services.
The chancellor confirmed the UK is now in recession.
The chancellor blamed global factors, especially the war in Ukraine which has prompted soaring energy and food costs.
Increase in tax for top earners
The chancellor has increased the amount of tax paid by the country’s highest earners. The top rate of tax will be brought down from £150,000 to £125,140. “Those earning £150,000 or more will pay just over £1,200 more a year,” he says.
Capital Gains Tax allowances will be hit, currently UK tax payers receive a £12,300 annual allowance, by April 2023 this will be cut to £6,000 for the next fiscal year, and then once again cut to £3,000 from April 2024.
Dividend allowance is currently £2,000 per annum, this will be cut in April 2023 to £1,000 and once again in April 2024 to £500.
The Inheritance Tax rate will remain frozen until 2028
The Inheritance Tax rate was frozen until 2026, this will remain frozen until 2028.
Energy firms will pay a windfall tax until March 2028
The Chancellor confirmed that the energy industry will be pay an expanded windfall tax of 35% up from 25%.
There will also be a 40% tax on profits of older renewable and nuclear electricity generation companies.
This will generate £14bn next year alone.
Motoring tax to be made “fairer” by Jeremy Hunt
With the rise of EVs the Chancellor has announced they will no longer be exempt from Vehicle Excise Duty from April 2025.
Spending squeeze on public services – excluding the NHS
Spending squeezes on public services have been confirmed.
Hunt keen to invest in eduction
Chancellor Jeremy Hunt stated that “being pro education is being pro-growth,” he went on to say it is a “moral mission” and not just a financial one.
Hunt “I will increase the NHS budget by £3.3bn over the next two years”
The chancellor committed to providing the NHS with a greater amount of funding for the national health service.
The UK is going green
Hunt aims for a £28bn energy saving with the UK increasing energy efficiency, new funding has been announced of £6bn.
The UK will be building a new nuclear power plant in Suffolk to help tackle the energy crisis, which will cost £700 million.
The government has maintained the Triple Lock system.
What is covered in the Autumn Statement?
As ever, the Treasury has remained tight-lipped about what will be in the Autumn Statement; however, there have been a number of hints dropped by Chancellor Jeremey Hunt.
Mr Hunt has publicly stated he intends to reduce the so-called fiscal black hole, which is the difference between what the government raises and spends. This indicates the new chancellor will be looking to increase certain taxes and cut spending with the aim of reducing the government’s deficit.
What are we expecting to see in the Autumn statement?
There is an expectation that certain income tax thresholds will be frozen, which at first glance may appear to save the taxpayer money; however, with inflation and wage increases, this will result in higher tax bills for many.