Chancellor Jeremy Hunt announced several measures in this year’s Autumn Statement in an attempt to plug the £55 billion ‘black hole’ in public finances.
The statement, delivered to the House of Commons on 17 November, included several tax threshold freezes and cuts in annual allowances.
One of the most important changes was the announcement that the additional-rate tax threshold would be lowered to £125,140, meaning a further 250,000 taxpayers will start being taxed 45% of their annual income.
The personal allowance of £12,570 will continue to be frozen at its 2021/22 level but for two extra years until 2028. According to chartered accountant Richard Murphy, this will increase the burden by up to £400 in income tax.
Hunt also announced Government plans to cut the capital gains tax allowance to £6,000 in 2023 and then to £3,000 in 2024, worth an extra £40m in revenue by 2027.
The Chancellor also delivered a number of support measures for smaller businesses in the UK.
As of April 2023, business rates relief for retail, hospitality and leisure will increase from 50% to 75%, equating to £110,000 per business over 2023/24.
Small businesses will also benefit from a new ‘supporting small business scheme’, which will cap business rate bills at £600 per year for smaller businesses.
Helen Dickinson, chief executive of the British Retail Consortium, said:
“This Autumn Statement supports [retailers] by reducing upwards pressure on prices in the short term and helping retailers protect jobs, keep shops open, and protect the vibrancy of local communities.”
Not everyone is pleased with the changes. Paul Johnson, director of the Institute for Financial Studies, said:
“Jeremy Hunt’s first fiscal event as Chancellor was a sombre affair. Surging global energy prices have made the UK a poorer country. The result is an OBR forecast that the next two years will see the biggest fall in household incomes in generations.”
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