Autumn Statement: impact on individuals

There aren’t many things that we can all agree on, but the issues that the current Chancellor is facing are without doubt onerous. He has to stick by previously agreed manifesto promises, whilst trying to squeeze the gap in public finances, tackle a soaring high inflation rate and prevent our economy from falling into recession (or indeed, more so than we already are).

In his first Autumn Statement, Chancellor Jeremy Hunt said “Today we deliver a plan to tackle the cost of living crisis and rebuild the economy,” he told MPs, adding the government’s priorities were “stability, growth and public services”.

He has announced many changes to personal tax, but perhaps not as many as anticipated, which include (but are not limited to) the following:

• The Income Tax Personal Allowance, higher rate threshold, main National Insurance thresholds and the Inheritance Tax thresholds will be frozen until at least 2028. Whilst inflation is at such a high level, this will bring more people within the tax net/push people into higher tax brackets.
• The point at which individuals will start paying the highest rate of tax will fall from £150,000 to £125,140, with effect from 6 April 2023.
• The Dividend Allowance (currently £2,000) will be reduced over the course of two years, such that it will be £1,000 from April 2023 and just £500 from April 2024.
• The Capital Gains Annual Exemption (currently £12,300 for individuals) will be reduced to just £6,000 from April 2023, halving again to just £3,000 from April 2024.

These changes will undoubtably bring more people within the scope of tax and we expect to also see a number of people being brought within the Self Assessment regime.

Disclaimer - All information in this post was correct at time of writing.