Graham McNeill - Lambert Chapman PartnerThe Autumn Statement was made today (17 Nov 2022) by the Chancellor to MP’s in the House of Commons.

Following the debacle of Kwasi Kwarteng’s mini-budget, this Autumn Budget was to try and restore order to Britain’s finances.

Jeremy Hunt the Chancellor has acknowledged we’re in a recession, and ‘things will get worse before they improve’. That’s a nice start to proceedings…

As was expected, the threshold for the highest 45p tax rate is being lowered from £150,000 to £125,140, (it was only recently announced the 45% rate was being scrapped! ) along with this, income tax thresholds will be frozen until 2028 (was previously frozen until 2026) resulting in millions of people paying more in tax. As pay increases – tax bands remaining the same.

Extremely disappointed the Dividends allowance that is currently at a pathetically low £2,000 a year, reducing to £1,000 from April 2023 and to only £500 from April 2024. At £500 I don’t see the point of having any allowance, alongside this the CGT allowance will also be reduced from £12,300 to £6,000 (April 2023) and then to £3,000 from April 2024.

The chancellor confirmed that the National Living Wage will be increased from £9.50 an hour for over-23s to £10.42 from April next year, that’s almost a 10% pay rise, and who will pay this increase, small businesses.  With Inflation at a 41 year high, additional business costs will cause businesses to fail and raises unemployment.

I understand that if nothing is done then the bank of England will have no option but to continue to increase interest rates, but will the announcements stop interest rates being increased further?

With the freeze in income tax thresholds, the additional tax rate band being reduced to £125k and company Corporation tax increasing to 25% (profits over £250k) a review of companies’ remuneration policy may be necessary as the split of salaries, dividends and benefits should be considered very carefully.

If you have any questions regarding the 2022 Autumn Statement and how the changes might affect you or your business, please get in touch.

Graham McNeill – Partner

Lambert Chapman Chartered Accountants

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