Autumn Statement, just announced by Chancellor Jeremy Hunt, is the complete opposite of the Liz Truss government’s mini budget. The sombre mood accompanied Mr Chancellor’s unveiled plans to cut spending and raise taxes in his Autumn Statement. He set out his position by highlighting the situation we are in.
It is undoubtedly a challenge to mend the economy and address the food and energy crisis sparked by the war in Ukraine and Brexit, burdened by the devastating consequences of wrong decisions that the Chancellor will have to calculate in the taxes and social and public spending for the next few years.
The headlines:
  • Chancellor admits that the UK is already in recession and the economy will shrink further next year.
  • Business and higher-rate income tax bands are frozen, but more people will pay the top rate as the level at which it starts is lowered to £125,140 from previously £150,000. With the increase in salary and related pay to catch up with inflation, there will also be an increased number of higher personal tax rate payers.
  • The energy price will be locked at £3000 for 12 months from April 2023. The government will still be helping, but this help will be less general (only targeted to the poorest households) as the typical household energy bill to rise to £3,000 a year from April.
  • Pensions and mean-tested benefits are to rise by 10%, in line with inflation, from April 2023.
  • Hourly pay increases to £10.42 from April as the National Living Wage catches up with inflation to the favour of about two million workers.
  • Electric vehicle drivers will pay road tax from April 2025.
  • Public spending will slow down in England. Only Health, education and defence will be maintained, but other departments are likely to be affected.
  • Windfall tax on big energy companies will increase from currently 25% to 35%.

Autumn Statement - Your Tax Assistant

Further reading: Can we trust economic forecasts

Autumn Statement