Autumn Budget: what does it mean for your finances?

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.  

Autumn Statement

(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

Contact us today at 01772 788200 to find out more about how we can help, or WhatsApp us out-of-hours at 07787 010190.

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

Kind regards Ilyas