As the country gets familiar with the full effects of the Autumn Statement 2022 and the big picture of the national finances, many people will wonder what these decisions will mean for them and their loved ones.
Over the next few weeks, analysts will break down the details of the Autumn Statement and explain what they might mean for you.
Taxes will go up, and spending will be cut in the Autumn Statement 2022.
Many people won’t be surprised that the Chancellor and his team have chosen this course. The war in Ukraine, rising energy prices, and global recession have created a perfect economic storm that slowed our planned recovery after the pandemic.
With tax hikes and spending cuts totalling billions of pounds, the Autumn Statement will make things worse for millions of struggling Britons. The analysts will conduct a more detailed analysis of the statement over the next week, but here’s a summary of what the Chancellor said.
Highlights of the Autumn Statement 2022
- Allowances for income tax and inheritance tax will stay the same until 2028. The top extra 45% income tax rate will be lowered to £125,140.
- The rate on a mortgage is expected to stay at 5%. (OBR)
- The UK is in a recession, and this year’s inflation rate is expected to be 9.1%. The OBR predicts that inflation will be 14%.
- The BOE rate will likely go up to 5%. (OBR)
- Energy bills will be capped at $3,000, and the price cap will be extended for one year past April 2023. This means that assessed households on benefits will get $900 in support payments next year.
- The tax break will end in 2025.
- The annual and lifetime allowance is also frozen.
- CGT allowances will drop to £6,150 in 2023 and £3000 in 2024.
- Dividend allowances will drop to £1000 in 2023 and £500 in 2024.
We see a pincer movement that will put more pressure on Britons who are already having a hard time. With income tax bands frozen until 2028, many people will probably be affected by implicit tax increases that make it hard to plan their finances. Getting the most out of your pension and ISA allowances could help you compensate for this. By keeping the rate of Higher Rates of Tax (HRT) the same, an extra 1.7 million taxpayers will now have to pay an extra £1,700 in taxes each year, while additional ratepayers will have to pay an extra £1,815 due to fiscal drag.
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- Advice on money and budgeting in general
Care Accountancy is the best place to start so we can figure out how to help you the most. Knowledge is power. You can talk to our advisors to get a free financial report or Book your Initial Consultation with one of our team members right now.
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