Autumn Budget 2022 Summary
Chris Broome – Chartered Financial Planner
As expected, the personal allowance (the amount you can earn before you start paying income tax) remains at £12,570.
The amount people will have to earn before they pay income tax at 40% remains at £50,270 and will remain at this level until April 2028.
The Chancellor has reduced the amount you can earn before paying the additional rate of income tax of 45% from £150,000 to £125,140.
These changes won’t automatically apply to Scottish tax-payers, this decision will be made by the Scottish Government. The Scottish Government’s budget is on 15 December 2022.
The Chancellor confirmed National Insurance contributions from 6 April 2023 will continue at their current rates. To confirm, this means:
- Class 1A and 1B employers pay 13.8% on earnings over £9,100.
- Class 1 employees pay 12% on their earnings between the primary threshold and the upper earnings limit; between £12,570 and £50,270.
- Class 1 employees pay 2%, on their earnings above the National Insurance contributions upper earnings limit.
The Chancellor confirmed the proposed increase to 25%, planned for 1 April 2023, will take place.
The inheritance tax threshold will be maintained at the existing level of £325,000 until April 2028.
The ‘triple lock’ will still apply to State pensions. CPI was 10.1% in September 2022 which was greater than 2.5% and the increases in earnings so the new and basic rate pension will increase by 10.1%.
This means the New State Pension for someone with a full National Insurance contribution record will increase from £185.15 per week to £203.85 per week.
The Basic State Pension for someone with a full National Insurance contribution record will increase from £141.85 per week to £156.20 week.
The age state pension is paid is legislated to increase over the next 25 years. There will be a review of this published in 2023 which will consider whether the existing timetable remains appropriate.
The lifetime allowance remains at £1,073,100 for 2023/24.
The annual allowance remains at £40,000 for 2023/24.
Money purchase annual allowance
The money purchase annual allowance remains at £4,000 for 2023/24.
Tapered annual allowance
Threshold income remains at £200,000 and adjusted income at £240,000 for 2023/24.
The adult ISA annual subscription limit for 2023/24 will remain unchanged at £20,000.
The junior ISA annual subscription limit for 2023/24 will remain unchanged at £9,000.
Please get in touch if you have any questions about what the Budget means for you or your financial plans.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.