Autumn Statement 2022

Taxation & Wages

• From next April, the legally-enforceable minimum wage for people aged over 23 will rise from £9.50 to £10.42 an hour
• The state pension and means-tested and disability benefits will increase by 10.1% in line with inflation
• With the exception of Scotland, the top 45% additional rate of income tax will apply to earnings over £125,140 instead of £150,000
• The income tax personal allowance and higher rate thresholds will remain frozen for a further two years, until April 2028
• Until April 2028, the main National Insurance and inheritance tax thresholds will remain frozen for a further two years
• Capital gains tax and dividends tax-free allowances are also scheduled to be cut next year and in 2024
• From now on, councils in England will be able to raise council tax up to 5% a year without a local vote instead of the current 3%

Energy

• Typical household energy bills can now be capped at £3,000 a year rather than £2,500, extending the cap for another year after April
• Next year, households receiving means-tested benefits will receive support payments of £900
• Pensioner households will receive £300, while recipients of disability benefits receive payments of £150
• Oil and gas company windfall profits are now subject to a 35% windfall tax, up from 25% until March 2028
• A new 45% tax on electricity-generating businesses will take effect in January

Economy & Public Finances

• The Office for Budget Responsibility estimates that the U.K. is in a recession, meaning that the economy has slowed down for two consecutive quarters
• OBR forecasts growth of 4.2% for the year as a whole, but the size of the economy will decline by 1.4% in 2023
• 1.3%, 2.6% and 2.7% growth is projected for 2024, 2025 and 2026
• The inflation rate in the United Kingdom is expected to be 9.1% this year and 7.4% next year
• In 2024, the unemployment rate is anticipated to escalate from 3.6% to 4.9%
• Rather than the proposed 3 years, the UK Government will give itself 5 years to meet its debt and spending targets

Government Spending

• Planned public spending will carry on as expected until 2025 but will increase far more slowly than previously expected
• For the next two years, the NHS budget will increase in England by £3.3bn, while spending on schools by £2.3bn a year
• Therefore, larger payments will pass to devolved governments in Scotland, Wales and Northern Ireland
• To hit one of several NATO targets, spending on Defence is to be maintained at 2% of national income
• Meanwhile, spending on Overseas aid is to be kept at 0.5% for the next five years — which is below the official 0.7% target

Business & Infrastructure

• The government will provide businesses with £13.6bn worth of business rate support over the next five years, including a mixture of freezes and reliefs
• To reduce costs, over 100 goods — including some food products — have been exempt from import taxes for two years
• A possible online sales tax has been scrapped by the government, as it argues business rate changes would be tougher on online retailers’ warehouses than on shops
• The Chief Scientific Adviser, Sir Patrick Vallance, will lead a review of how emerging technologies can be supported by post-Brexit regulations

Other Measures

• A two-year delay has been granted to the lifetime cap on social care costs in England, which was due in October 2023
• As a result of inflation, social housing rent increases in England will be capped at 7% from next April instead of 11%
• Vehicles powered by electric motors, vans, and motorcycles will have to pay road taxes starting in April 2025
• Suffolk will get an elected mayor — with mayors for Cornwall, Norfolk and an area in north-east England to follow