What does the Autumn Statement mean for me?

Ali Bowen, Lecturer in Tax, breaks down what the new tax rises mean for individuals, businesses and the oil and gas industry.

The warnings have been coming in thick and fast from both the new Chancellor, Jeremy Hunt, and the prime minister, Rishi Sunak: the UK is heading for austerity. The promises of tax rises - an attempt to stabilise the UK’s troubled economy - were realised in today’s statement.

What does the Autumn Statement mean for me?

1. Highest earners will pay more.

The top rate of income tax - 45% - will be paid on earnings above £125,140, instead of the current £150,000. This will hit the higher earners.

2. Frozen: Income tax threshold and personal allowance.

The higher rate personal income tax threshold and personal allowance is to be frozen until April 2028. This means an effective tax increase for all individuals that are higher rate taxpayers – individuals earning over £50,270. In the past we have generally seen the tax band rise in line with either inflation or earnings.

3. Frozen: National insurance and inheritance tax thresholds.

National Insurance (NIC) and inheritance tax (IHT) thresholds are also frozen until April 2028. IHT thresholds haven’t increased for years but NIC thresholds usually increase annually. Again, this equates to an effective tax increase.

4. Returns on investment assets diminish

Dividend and capital gains tax free allowances are to be reduced from April 2023 and further reduced in April 2024. Such measures will mean an individual that receives dividend income of more than £2,000, will see their taxable income and therefore their tax liability increase. Similarly, if an individual realises chargeable gains, more of those gains will be chargeable to capital gains tax.

5. Minimum wage increases, but not with the rate of inflation.

For those over 23, the minimum wage will rise to £10.42 from £9.50. This is better than no increase to those on lower incomes struggling with the cost-of-living crisis. However the percentage increase is well below the rate of inflation, which many will see as a disappointing move by the Chancellor.

6. State pension gets triple lock increase.

The state pension, means tested and disability benefits to rise by 10.1% - retaining the triple lock promise which many feared the Chancellor wouldn’t honour. This will be a huge relief for many of the most vulnerable in our society.

Read the rest of the insight and find out what the Statement means for businesses.

Read more here