On Thursday 17 November 2022, Chancellor Jeremy Hunt delivered the Autumn Statement with an emphasis on rebuilding the UK economy amidst the cost-of-living crisis. In this update, we summarise the key points.
The Chancellor has announced a freeze on tax thresholds including income tax and inheritance tax for a further two years to April 2028. The level for the 45p additional rate of tax will be reduced from £150,000 to £125,140. Dividend allowances will be cut to £1,000 in 2023 and £500 in 2024 alongside the annual exempt allowance for capital gains tax to £6,000 in 2023 and £3,000 from 2024.
Stamp Duty Land Tax
The Stamp Duty Land Tax (SDLT) cuts that were announced in the mini-budget will remain in place until 31 March 2025.
On 23 September 2022, the Government increased the nil rate threshold on SDLT from £125,000 to £250,000 in England and Northern Ireland and increased the nil rate threshold for first-time buyers from £300,000 to £425,000.
The Government are proposing a £14bn tax cut on business rates which will benefit approximately 700,000 UK businesses.
The Government will focus on economic growth with a focus on energy, infrastructure, and innovation. Investment in energy efficiency will be doubled by £6bn from 2025.
Cost of living support
The Chancellor has identified plans to support households and businesses during 2023. The National Living Wage will rise to £10.24 per hour, an increase of 9.7%. This equates to an annual rise of over £1,600 to a full-time worker.
Benefits will rise in line with inflation and the Government’s energy price guarantee will be in place for a further 12 months at an average of £3,000 for a ‘typical household’. Additional means-tested cost-of-living payments of £900 have also been announced.
Health and social care
The Chancellor has announced a £3.3bn increase in NHS funding and an allocation of a further £1bn in social care followed by £1.7bn the following year.
The schools’ budget will increase by a further £2.3bn per year.
Forecasts from the Office for Budget Responsibility (OBR) forecast the economy will grow by 4.2%. GDP will reduce by 1.4% in 2023 before rising by 1.3% in 2024, 2.6% in 2025 and 2.7% in 2026.
The OBR expect an average inflation rate of 7.4% in 2023.