Reacting to the Chancellor’s Autumn Statement on 17th November, Head of Tax Angela Keery said:
“The Autumn Statement delivered today is confirmation of the bleak outlook we face both in terms of business finances and our personal, take-home pay packets. Individuals and business owners will now feel their tax obligations increase, with companies in Northern Ireland in particular making no major gains from today’s announcement.
The Chancellor’s move to maintain current personal tax thresholds, essentially bringing more people into higher tax brackets by extending the freeze until April 2028, may not cost individuals anything in the short term but mitigates any small boost they may have gotten from a pay rise awarded by their employer in line with inflation. Cuts to the tax-free dividend allowance to £1,000 in April 2023 and again to £500 in 2024 mean business owners and directors will face increased tax burdens as they pay themselves. Capital Gains Tax exemptions will also drop by more than half to £6,000 in 2023, and again to £3,000 in 2024, meaning the disposal of assets will become a tax-heavy and much less attractive option also.
Whilst the personal tax threshold and basic rate bands are frozen there is a drop in the taxation threshold for top earners to £125,000, ensuring more of the highest earners contribute the top 45% level of income tax.
What will be more popular from today’s statement is the increase in the National Living Wage to £10.42. Also more palatable in today’s high-inflation economy is the move to expand the windfall tax on the energy industry. This increases the tax burden on those who are generating more profits and is a generally well received way of raising an additional £14bn in tax revenue next year alone.
With no significant takeaways for Northern Ireland, however, what’s vital now is that business owners and individuals alike take time to digest this information, assess their financial situation and set a realistic, achievable budget for the coming months that accounts for continuing inflation and rising energy costs, seeking informed and reliable business advice where feasible.”
To discuss how the Autumn Statement will affect you, your family or your business please contact Angela Keery, Head of Tax T: 028 9032 3466 E: angelakeery@bakertillymm.co.uk