The government’s financial plans for the upcoming months have been released by Chancellor Jeremy Hunt in the Autumn Statement for 2022. These plans are based on forecasts provided by the Office for Budget Responsibility (OBR). The inflation rate has now reached 11.1% — the highest rate for 41 years in the UK. The Autumn Statement addresses how the government proposes to rebuild the economy and deal with the cost of living crisis. Here, we’ve detailed the government’s latest financial plans and how some of them may affect you.
Stamp duty cuts were announced in September’s mini-budget. These will now continue until March 2025, which is great news if you’re looking to buy a new home. To recap, the nil-rate band has been doubled to £250,000. If you’re a first-time buyer, you’re exempt from stamp duty up to a property value of £425,000.
Earnings and personal taxes
The National Living Wage, which is currently £9.50 per hour, will be increased next year. As of April 2023, it will go up by 9.7%, making it £10.42 per hour.
The current tax freezes, which include thresholds and allowances for inheritance tax, income tax and National Insurance, will continue for a further 2 years. This means they will be frozen until April 2028.
The additional income tax rate, which is 45%, is currently payable on earnings over £150,000. From April 2023, this tax will be due on earnings over £125,140.
The tax allowances for capital gains tax and dividends will be cut as of next year.
To help with the high cost of living, the price cap on energy bills will continue for another 12 months. Currently capped at £2,500 for an average household, the cap will increase to £3,000 from April 2023.
The state pension triple lock will stay in place. This protects your income as it will increase each year in line with the highest of either inflation, earnings or 2.5%.
Social care and healthcare
NHS funding will be increased by £3.3 billion and extra grant funding for social care will also be provided. This will equate to an additional £1 billion next year and £1.7 billion the following year. The aim is to provide 200,000 new care packages and free up more hospital beds. A report is also to be released on the number of doctors and nurses needed over the course of the next 15 years.
If you receive any benefits, the Chancellor’s Autumn Statement included an announcement that they will be increased. This will be in line with the inflation rate of 10.1%. As well as that, those who are considered the most vulnerable will receive additional one-off payments. These include £900 for those on means-tested benefits, £300 for pensioners and £150 for those receiving disability benefits.
To avoid excessive rent increases in line with inflation, social housing rents will be capped at 7% in 2023.
The windfall tax that’s levied on gas and oil firms will be increased next year from 25% to 35%. An extra 45% charge will be applied to companies producing electricity.
If you own an electric vehicle, you won’t have had to pay any car tax up until now. However, the 2022 Autumn Statement revealed that vehicle excise duty (VED) will be applicable on all electric vehicles from April 2025.
Benefit from the tax cuts announced in the Autumn Statement
Are you ready to take advantage of the stamp duty cuts? Give us a call on 01322 907 000 to speak with one of our friendly mortgage brokers. They’ll provide you with expert, unbiased advice and search for a competitive mortgage deal for you.
With unrestricted access to the market, including mortgage products only offered via brokers, you can rest assured you’ll be offered the best deal to suit your needs and circumstances. Along with the tax cuts mentioned in the Autumn Statement 2022, this has the potential to save you a considerable amount of money over the term of your mortgage.