“British families make sacrifices every day to live within their means, and so too must their government, because the United Kingdom will always pay its way.” – Chancellor Jeremy Hunt
As Jeremy Hunt took to the dispatch box just 34 days after taking on the role of Chancellor of the Exchequer, all eyes were on him.
Following the dramatic sacking of Kwasi Kwarteng after his October mini-budget unleashed market turmoil, a swift change in Prime Minister, and an ever-worsening cost of living crisis, Hunt promised his Autumn Statement on 17 November (delayed from 31st October) would ensure his tax and spending plans would “stand the test of time”.
With food prices in the UK rising at their fastest rate for 45 years, and the Bank of England warning that the nation is facing its longest recession since records began, Hunt’s focus, he claimed, would be “economic stability and restoring confidence that the United Kingdom is a country that pays its way”.
New fiscal rules, announced by Hunt in the statement, dictate that public sector borrowing as a percentage of GDP must fall and be below 3% within a five year period. That left Hunt with a “black hole of around £55bn in public finances” to plug – either through spending cuts or tax rises.
Set on such a stage, the Chancellor’s inaugural Autumn Statement proved to be quite unlike any other seen since the days of the coalition.
Acknowledging that the UK is currently in recession, while reiterating that the government’s three-fold priorities (stability, growth and public services) will help rebuild the economy and reduce debt, Hunt went on to announce a barrage of tax hikes, spending cuts and threshold freezes.
We’ve outlined the main announcements from the statement below and have put together a report with all the details, which you can download here >.
We already knew from Kwasi Kwarteng’s mini-budget, and the changes Jeremy Hunt made in the aftermath of it, that basic-rate Income Tax is to remain at 20% “indefinitely”, the National Insurance increase has been scrapped and dividend tax rates will remain unchanged.
However, there were some new announcements, affecting individuals, made in the Autumn Statement:
- A reduction of the threshold for additional rate Income Tax from £150,000 a year to £125,140 from 06 April 2023.
- The personal allowance threshold will remain frozen for a further two years, continuing until 2028.
- The freeze to the NICs thresholds was also increased by two years, again continuing until April 2028.
- There will be a cut to the Capital Gains Tax allowance (also known as the annual exempt amount) over the next two years.
- The pensions triple-lock has been upheld, meaning that state pensions will continue to rise in line with whichever is the highest of: the average wage increase, September’s inflation figure, or 2.5%
See details of all personal announcements in our Autumn Statement Report:
Upon taking up his new role as Chancellor last month, Mr Hunt made announcements about several measures that would affect businesses. These included, among other things: Corporation Tax rising to 25% from 01 April 2023, IR35 reforms to remain in place and the bankers’ bonus cap being abolished.
Other proposals made in the Autumn Statement were:
- Changes to the rates of the two Research and Development (R&D) relief schemes.
- The Annual Investment Allowance (AIA) has been permanently set at £1m for businesses.
- VAT registration and deregistration thresholds will remain at their current levels until 01 April 2026.
For full details of all business announcements made, read our full Autumn Statement Report:
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If you have any questions about how the announcements in the Autumn Statement may affect you, your family or your business, get in touch. You can call us on 01483 205850, or use our contact form.