Last month, Chancellor of the exchequer Jeremy Hunt announced a wave of new updates regarding energy, the economy, and more in the autumn budget.
Homeowners, business owners, and individuals tuned in to find out what news on energy, taxes, and other things will affect them.
So, what was announced in the autumn budget?
And more importantly, how does it affect you?
What's the forecast
To start, it’s important to note the forecast that was made by the OBR (Office for Budget Responsibility).
OBR stated that the level of inflation for this year stands at 9.1% but is predicted to drop to 7.4% next year (2023).
As well as this, the OBR states that we are currently in a recession that is predicted to last a year.
Hunt announced a large number of changes in the world of tax.
So let’s break each of them down.
- Firstly, there’s the news on Capital Gains’s tax-exempt amount.
The threshold, which before was set at £12,300, will now decrease to £6,000 effective from April 2023.
Additionally to this, there will be another decrease in April 2024 to £3,000.
- The secondary threshold for National Insurance contributions will be set at £9,100 commencing from April 2023.
This fixed rate will last until April 2028.
For small businesses, this will affect you due to the Employment Allowance.
- The threshold for NICs and Income Tax will remain fixed at their current standings till April 2028.
NIC changes will be legislated by the Government in early 2023, while the Autumn Finance Bill 2022 will legislate income tax measures.
- Dividend Allowance is to be cut to £1,000 from £2,000 from April 2023.
A further cut will be in effect from April 2024, this cut will reduce to £500.
- The threshold for VAT registration and deregistration thresholds are to be maintained at £85,000 as it currently stands for a further two years. This will run from April 2024.
- Pension payments, means-tested benefits, and disability benefits will increase by 10.1% in line with inflation.
- Individuals who earn over £125,140 are now having to pay the top 45% additional income tax.
The current threshold is £150,000 and now 250,000 more workers will pay tax at the highest rate.
In regards to income, Jeremy Hunt announced a change in the minimum wage.
The minimum wage will be increased for UK workers over the age of 23.
The current amount stands at £9.50 an hour to £10.42 an hour. This will be implemented from April 1st, 2023.
- The support scheme that was implemented to support those struggling with the energy crisis will continue for an additional year.
However, the cap on bills won’t be the same.
The current cap of £2,500 will change to £3,000 after April next year (2023).
- Support payments will be given out.
People on means-tested benefits will be given £900 over the next year.
Those on disability benefits will be given a £150 payment.
And for pensioners, a payment of £300 will be issued.
- From January 2023, a temporary tax of 45% will be given to energy companies.
As well as this, in January 2023, the 25% levy on oil and gas companies is to increase to 35%.
- The online sales tax that was planned has been put on hold.
It’s been shelved due to its ‘complexity’.
- There will be a removal of import taxes on over 100 goods for two years.
The cut is to decrease costs.
- Electric vehicles will no longer be exempt from vehicle excise duty as of April 2025.
Jeremy Hunt states;
“Because the OBR (Office for Budget Responsibility) forecasts half of all new vehicles will be electric by 2025, to make our motoring tax system fairer I’ve decided that from then, electric vehicles will no longer be exempt from vehicle excise duty.”