Improving government finances. Creating “a path to stability” by improving government finances by £55bn, through a mix of spending cuts and higher taxes.
Numerous personal tax increases:
- The threshold to start paying income tax at the Additional Rate of 45% is to move down from £150,000 to £125,140 per annum.
- The Stamp Duty Land Tax cuts announced by the former Chancellor were kept, but they will be phased-out by March 2025.
- The tax-free dividend allowance is to fall from £2,000 to £500 per annum by April 2024.
- The tax-free capital gains tax allowance is to fall from £12,300 to £6,000 next year and then to £3,000 per annum by April 2025.
- Electric vehicle owners are to pay vehicle excise duty for the first time from 2025.
- A series of ‘stealth taxes’: income tax thresholds will be frozen until 2028 (it was previously to 2026); National Insurance and inheritance tax allowances are to be frozen.
A boost to state pensioners. The Pension Triple Lock is maintained; this means that in April 2023, the state pension will increase in line with inflation, by £870. The Pension credit will see the same rate of increase.
A boost to lower earners:
- The National Living Wage will increase from £9.50 to £10.42 an hour for over-23s from April next year.
- Universal credit is to rise in-line with inflation at 10.1%.
Company tax increases. There will be an expanded windfall tax on oil and gas company profits, from 25% to 35% between January 2022 and March 2028.
A mixed picture on household energy bills. The Energy Price Guarantee is to be extended beyond April 2023, but the average bill per household will increase to £3,000 per annum.
Some public spending will rise, mostly to already-agreed levels:
- The NHS budget is to increase by £3.3bn per annum for two years.
- Education expenditure will increase by £2.3bn per annum for two years.
- Major rail projects such as HS2 and Northern Powerhouse Rail are to proceed.