Autumn Budget 2022 Summary
Chris Broome – Chartered Financial Planner
Income Tax
5.17 HM Treasury Autumn Statement 2022
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.
National Insurance
5.18 HM Treasury Autumn Statement 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.
Corporation Tax
2.5 HM Treasury Autumn Statement 2022
The Chancellor confirmed the proposed increase to 25%, planned for 1 April 2023, will take place.
Inheritance tax
5.19 HM Treasury Autumn Statement 2022
The inheritance tax threshold will be maintained at the existing level of £325,000 until April 2028.
Pensions
2.32 and 2.48 HM Treasury Autumn Statement 2022
State pension
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.
Lifetime allowance
Page 64 HM Treasury Autumn Statement 2022 – Policy Costings
The lifetime allowance remains at £1,073,100 for 2023/24.
Annual allowance
Page 64 HM Treasury Autumn Statement 2022 – Policy Costings
The annual allowance remains at £40,000 for 2023/24.
Money purchase annual allowance
Page 64 HM Treasury Autumn Statement 2022 – Policy Costings
The money purchase annual allowance remains at £4,000 for 2023/24.
Tapered annual allowance
Page 64 HM Treasury Autumn Statement 2022 – Policy Costings
Threshold income remains at £200,000 and adjusted income at £240,000 for 2023/24.
Savings
ISAs
Page 64 HM Treasury Autumn Statement 2022 – Policy Costings
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.
Questions?
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.
