Autumn Statement

Jeremy Hunt announced a range of tax hikes and spending cuts as part of his plan to try and get the country’s debt-to-GDP ratio under control by the middle of the decade. 

The overall package of tax hikes and spending cuts are designed to raise £55bn for the public purse. 

(4-minute read)

We will cover:

The Autumn Statement changes to UK tax

Tax bands frozen 

The biggest change, and the one that will impact most people, is the freezing of tax allowances.

Income Tax and National Insurance thresholds are set at £12,570.

This threshold has already been frozen for four years to April 2026.

This will now be stretched to April 2028.

The 45p threshold for higher rate payers earning above £150,000 has also been reduced to £125,140 – hitting the most wealthy workers.

Inheritance Tax

More people will also pay Inheritance Tax after changes today by Mr. Hunt.

Inheritance Tax is a 40% tax applied after a person dies to estates that are worth over £325,000.

Today Mr. Hunt froze inheritance tax bands from 2025/26 to 2027/28.

The change means more and more people will be due to pay the tax as inflation rises.

Council tax increase: Millions set for rise of up to 5%

Mr. Hunt’s move will allow local authorities to increase households’ council tax bills without the permission of residents, in a bid to ease pressure on social care and other stretched local services.

Average Band D council tax bills are already £1,966, and are set to rise above £2,000 for the first time in April after today’s announced increase.

Electric cars will now have to pay road tax

Jeremy Hunt confirmed green cars will no longer be exempt from paying road taxes from April 2025.

National living wage and state pension set for ‘largest ever increases’

The national living wage for those over 23 will be raised from £9.50 to £10.42. The 9.7 per cent increase will come into force in April 2023. That means that from April [2023], the hourly rate will be £10.42 which represents an annual pay rise worth over £1,600 to a full-time worker.

Universal Credit to get pay rise of £600 next year, state pension and other benefits will increase in line with inflation.

New cost of living payment: cost of living support with £900 payments for the most vulnerable

People on benefits will get a share of £900, while pensioners will receive £300 and those on disability benefits £150 to help pay bills when the energy support for all runs out in April.

The energy price guarantee will be less generous from April, but there will still be universal support, with the Government limiting energy bills at a higher level of £3,000 per year for the average household for a period of 12 months.

The cap has been increased from the current level of £2,500, meaning households will still be paying more than they are at the moment.

Capital gains and dividends tax changes

The annual tax-free dividend allowance will be reduced from £2,000 to £1,000 for the 2023/24 tax year, and will be reduced again to £500 in the 2024/25.

Capital gains tax

The annual CGT allowance, which is the amount of profit you can make from the sale of an asset before you are taxed, has been halved for 2023-24 and halved again for the following tax year.

UK hits power firms with windfall tax, hikes oil company levy.

The levy on oil and gas companies would be increased to 35% from its current rate of 25% and extended until the end of March 2028.

Stamp duty cut to end in 2025

People buying properties will pay more stamp duty from March 31, 2025.

Changes to R&D

From 1st April 2023

SME enhancement rate reduced from 130% to 86%

Payable credit rate reduced from 14.5% to 10%

A loss making SME spending £100 on qualifying R&D

Payable credit will decrease from £18.85 to £8.60

An SME making more than £250k profit spending £100

R&D related tax saving will decrease from £24.70 to £21.50

Sending an e-mail is simple too, just fill out the short form below and we’ll get back to you!

Kind regards Ilyas

Autumn Budget: what does it mean for your finances?