The Autumn Budget was held on Wednesday 27th October and we thought that it would be useful to provide a brief summary of the key points.
Firstly, it has already been announced that the majority of tax rates and allowances, have been frozen until 2025/26. This includes:
- Income Tax allowances/thresholds:
- Personal allowance – £12,570
- Higher rate threshold – £50,270 (England & Wales – the Scottish Budget doesn’t take place until 9th December)
- Capital Gains Tax – £12,300
- Inheritance Tax
- Nil Rate Band – £325,000
- Residence Nil Rate Band – £175,000
- Corporation Tax
- Set to rise to 25% from April 2023
- Small companies with profits below £50,000 will continue at 19%
- Reintroduction of tapering relief for businesses with profits under £250,000
- Pension Lifetime Allowance – £1,073,100
With inflation expected to remain high, it is more important than ever, to efficiently utilise your available allowances. If you would like to discuss further, please do get in touch with Val or Claire. You’ll find their contact details on our website, by clicking their names.
So what changes were there? Thankfully there were no big surprises, but here’s a summary of the main points, some of which were already expected:
- Pensions for low earners – the way in which some people make payments to their pensions, means that they are losing out on tax relief (ie where a pension contribution is deducted from gross pay, but the individuals earnings are below the personal allowance). HMRC are to identify these individuals and they will become entitled to a top up, from 2025/26.
- ISA allowances are to remain as they are – £20,000 for adults and £9,000 for Junior ISAs.
- State Pension is to increase by 3.1% from 6th April 2022.
- Dividends – the rate of tax is to increase by 1.25% from 6th April 2022.
- National insurance was confirmed to increase by 1.25% from 6th April 2022 for employees, employers and the self–employed.
Should you wish to discuss any of these changes, please contact Val or Claire, to discuss further.
