The Chancellor, Jeremy Hunt, was faced with a challenging economic backdrop to his first major set piece, grappling with a combination of over 11% inflation, an official recession and the need to calm markets and re-establish the UK’s financial credibility following the turmoil of September’s ‘mini-Budget’.
Mr Hunt’s position was not an enviable one. His long-term focus, he stated, is on stability, growth and public services. Most of the attention, however, centres on the balance he attempted to strike between tax increases (real and stealth) and spending cuts to fill the over £50 billion hole he has inherited. The key announcements covered a wide range of ground.
Some of the highlights were:
■ The main income tax allowances and thresholds, the main national insurance thresholds, plus the inheritance tax nil rate bands will stay at their current levels for an extra two years to April 2028.
■ The threshold for the 45% additional rate of income tax will reduce from £150,000 to £125,140 from April 2023.
■ The dividend allowance will reduce from £2,000 to £1,000 from April 2023 and be halved again to £500 from April 2024. The capital gains tax annual exempt amount will be cut from £12,300 to £6,000 for 2023/24 and halved to £3,000 from April 2024.
■ The government’s energy price guarantee will be adjusted from April 2023 so that the typical household will pay £3,000 a year.
■ The state pension, pension credit, universal credit (UC), the benefit cap and certain other benefits will increase by 10.1% in line with CPI inflation to September 2022.
■ Business rates bills in England will be updated from April 2023 to reflect April 2021 property values and there will be a £13.6 billion package of targeted support for businesses over the next five years.
■ Research and development tax reliefs will be reformed with respect to expenditure incurred from 1 April 2023.
■ The windfall profits of oil and gas companies will be subject to further tax increases and a new levy will apply to the ‘extraordinary returns’ of low carbon electricity generators.
Download our Autumn 2022 Budget Summary here
If you have any questions about the summary’s contents or how any aspects of your tax and financial planning may be affected by the Budget,
please contact us on 01142 664 432 or info@smh.group to discuss them.
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