Hunting For Growth: Autumn Statement 2022

Last Thursday, after only three weeks into his role as Chancellor of the Exchequer, Jeremy Hunt set out his economic and tax agenda. Although entitled ‘Autumn Statement’ his plans have a distinctly wintry feel and there is no doubt that the tax burden for both individuals and businesses is increasing at quite a pace.

For personal tax, changes mainly involve extending the stealth taxes via the freezing of many of the main tax allowances and tax bands. These were originally frozen until April 2026 and under the current proposals these are extended for a further 2 years to April 2028. It is expected that as pay increases, more taxpayers will either find themselves paying income tax for the first time or moving into the 40% tax band. Significantly the threshold for paying 45% tax is being reduced from £150,000 to £125,000. Capital Gains tax is also hit together with Inheritance Tax.

Businesses will face increased costs for National Insurance and National Minimum Wage and the increase in Corporation Tax remains.

Many umbrella workers will face paying 45% tax from next April so if you haven’t already considered operating pension sacrifice then it is something that may now come into play. For workers already using pension sacrifice you may need to evaluate the amount you are sacrificing. If you still have a limited company and are considering closing that company, then I would suggest that sooner rather than later may be best. The changes in dividend allowance and Capital Gains Tax (CGT) may mean that the tax position on closure this current tax year will more beneficial than future tax years. If you want to explore your options here then our sister company, Carrington Accountancy can help.

The below document details the announcements – planning and tax mitigation where possible should now be firmly in focus.

If you would like to discuss anything with myself or the team do get in touch. We are here to support our workers and help them plan as tax burdens increase.

Autumn Statement November 22