The highly anticipated Autumn Statement was announced by the new Chancellor – Jeremy Hunt – last week. Growth remained the overall objective, but rather than cut taxes fully, Chancellor Hunt chose to target those who can afford it and bear the largest burden. This came at a stark contrast to the pathway set by his predecessor- the New Chancellor’s propositions aim to raise around £25bn from taxes and cut spending by £30bn. Here, Joe McGovern, our Head of Advice, outlines what the statement announcements mean to you:

Income tax

  • Rates– Income tax rates for 2023/24 will remain at the basic, higher and additional rates of 20%, 40% and 45% respectively. The abolition of the additional rate of tax announced in the Mini Budget will not happen.
  • Allowances and thresholds– The point at which additional rate tax becomes payable will be cut from £150,000 to £125,140 from 6 April 2023. This will mean that those already paying tax at 45% will pay an extra £1,243 in 2023/24- effecting approximately 250,000 individuals across the country.
    The personal allowance and basic rate band remain frozen at £12,570 and £37,700 respectively until April 2028 (an additional two-year extension). This means that the higher rate tax threshold will remain at £50,270 for those entitled to a full personal allowance.
  • Dividends– The dividend allowance will be halved £2,000 to £1,000 for 2023/24, and halved again to £500 for 2024/25. Consequently, many more investors will need to complete tax returns if their dividend income exceeds £1,000 next year. The dividend tax rates for basic rate, higher rate and additional rate taxpayers will remain at 8.75%, 33.75% and 39.35% for both the current tax year and 2023/24. The 1.25% increase installed from the start of 2022/23 will not be reversed.

Capital Gains Tax (CGT)

  • Rates – No change to the rates of CGT and these will continue to be 10% and 20% (18% and 28% respectively for gains on residential property).
  • Allowances – Annual exemption to be cut from £12,300 to £6,000 from April 2023 and then £3,000 from April 2024. Estimated 235,000 more will need to file self-assessment returns as a result of this change.


  • State Pension – Triple Lock on State Pension would maintain – guaranteeing 10.1% increase from next April.

Inheritance tax (IHT)

  • Allowances – The current IHT allowances – nil rate band (NRB) and residence nil rate band (RNRB) – will be frozen until April 2028. The NRB will remain at £325,000 and the RNRB at £175,000 until April 2028.

Corporation tax

  • Rates – Corporation tax will rise to 25% from April 2023 however, small companies with profits below £50,000 will continue to pay at the current rate of 19%. Tapering relief will also be reintroduced for businesses with profits between £50,000 and £250,000 so that they pay less than the main rate.

National Insurance (NI)

Rates – The increase 1.25% to NI to help pay for social care reforms has been scrapped.

Things to be mindful of…

  • Income Tax – those higher rate tax payers close to the current additional rate bands limits maybe caught with the new allowance changes.
  • Dividends – dividends received within General Investment Accounts (GIAs) above the Dividend Allowance will be subject to taxes.
  • Capital Gains Tax – if you have any unrealised gains, it maybe prudent to realise these gains before the allowance if cut.
  • Pensions – with income tax threshold for additional rate tax payers reduces, there will be more who are eligible to claim tax relief at an additional rate for personal pension contributions.
  • State Pension Increase – whilst this is great, be wary of what effect this will have on your Personal Allowance. State Pension uses up the 0% tax allowance each UK individual has. The increase may have a knock-on effect on other taxable incomes.

As always, if you have any concerns, doubts or questions, please speak to your financial adviser.