He has revealed tax rises and spending cuts worth billions of pounds aimed at mending the nation's finances after the confidence crash of the last mini-Budget.
The main measures are:
Tax and employment
- Minimum wage for people aged over 23 to increase from £9.50 to £10.42 an hour from next April;
- State pension payments and means-tested and disability benefits to increase by 10.1, per cent in line with inflation;
- Top income tax rate of 45 per cent paid on earnings over £125,140, instead of £150,000 (except Scotland);
- Income tax personal allowance and higher rate thresholds frozen for further two years, until April 2028;
- Main National Insurance and inheritance tax thresholds also frozen for further two years, until April 2028;
- Tax-free allowances for dividend and capital gains tax also due to be cut next year and in 2024;
Local councils in England will be able to increase council tax up to five per cent a year without a local vote, (currently three per cent);
- Electric cars, vans and motorcycles to pay road taxes from April 2025
- Support worth £13.6bn over next five years to help firms with business rates, including a mixture of freezes and reliefs;
- Import taxes removed on more than 100 goods, including some food products, for two years to reduce costs
- Plans for a possible online sales tax scrapped;
- Review into how post-Brexit regulation can support emerging technologies.
- Household energy price cap extended for one year beyond April but made less generous, with typical bills capped at £3,000 a year instead of £2,500;
- Households on means-tested benefits will receive £900 support payments next year;
- £300 payments to pensioner households, and £150 for individuals on disability benefit;
- Windfall tax on profits of oil and gas firms increased from 25 per cent to 35 per cent and extended until March 2028;
- New 45 per cent tax on companies that generate electricity, to apply from January.
Economy and predictions
- The Office for Budget Responsibility (OBR) judges UK to be in recession, meaning the economy has slowed for two quarters in a row;
- It predicts growth for this year overall of 4.2 per cent, but size of the economy will shrink by 1.4 per cent in 2023;
- Growth of 1.3 per cent, 2.6 per cent, and 2.7 per cent is predicted for 2024, 2025 and 2026 respectively;
- UK's inflation rate predicted to be 9.1 per cent this year and 7.4 per cent next year;
- Unemployment expected to rise from 3.6 per cent to 4.9 per cent in 2024;
- Government will give itself five years to hit debt and spending targets, two years longer than current plans.
- Scheduled public spending will be maintained until 2025, but then grow more slowly than previously expected;
- In England, NHS budget will increase by £3.3bn a year for the next two years, and spending on schools by £2.3bn;
- Larger payments to devolved governments in Scotland, Wales and Northern Ireland;
- Defence spending to be maintained at two per cent of national income;
- Overseas aid spending kept at 0.5 per cent for the next five years.
- Lifetime cap on social care costs in England due in October 2023 delayed by two years;
- Social housing rent increases in England capped at seven per cent from next April.
Autumn Statement 2022
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Further IR35 information
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