A budget to rebuild the UK economy
A budget to rebuild the UK economy
The Autumn budget is regarded as an update halfway through the year after the main March budget. With all of the changes in 2022, this Autumn budget will be just as big as the main event. Here is our overview of the key announcements and how they will impact you and your business.
Inflation hit 11.1% in October 2022 and everything is costing us more from food, fuel, interest rates through to energy. The Chancellor Jeremy Hunt delivered a budget that was set out to tackle the cost-of-living crisis and rebuild the UK economy.
Income Tax
The threshold for higher rate tax will be lowered from £150,000 to £125,140, for those earning over £150,000 this will mean an increase of over £1,200 more per year.
The personal allowance threshold will be frozen until 2028 which means any pay rise could result in you moving into a higher tax bracket. Either way it will probably mean a greater proportion of your income will be taxed as they are not being increased in line with prices.
The personal allowance level in England, Wales and Northern Ireland (Scotland set their own) will stay at £12,570. £12,571 to £50,270 will be set at 20%, £50,271 to £125,140 will be 40% and anybody being paid over £125,140 will pay 45%.
Dividends
The tax-free allowance for dividends (the amount you can receive each year in dividends, if you own shares, before paying tax) will be reduced from £2,000 to £1,000 in 2023 and then reduced even further to £500 in 2024. This allowance was £5,000 in 2018 so this is quite a difference.
The annual allowance before capital gains tax (the tax you pay when you sell an asset such as a second home) is also being reduced from £12,300 to £6,000 in 2023 and then to £3,000 in 2024.
Energy
Support with energy bills will remain in place but from April 2023 this will be less generous. The energy cap for a typical household will rise from £2,500 to £3,000 this will run for 12 months.
The energy industry will see an increase in windfall tax from 25% to 35%, there will also be a temporary 45% levy on electricity generators.
The Sizewell C nuclear plant has been given the go ahead to be built in the southeast of England. The Chancellor’s plan is expected to provide up to 7% of the UK’s total electricity in the 2030’s which will contribute to us becoming energy independent.
Motoring
Electric vehicles will no longer be exempt from Vehicle Excise Duty from April 2025.
National Living Wage
There will be an increase in the National Living Wage for over 23’s from £9.50 per hour to £10.42 per hour from April 2023.
Sean Daniel, Managing Director said “It’s been a tough year all round and the UK is now officially in a recession. The Chancellor Jeremy Hunt has announced a series of measures to try to encourage growth and boost recovery.”
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