CHANCELLOR Jeremy Hunt’s Autumn Statement on Wednesday set out his plans for taxes and savings.
Mr Hunt vowed to “reduce debt, cut taxes and reward work” as he unveiled a package aimed at saving cash-strapped Brits and turbo-charging the economy.
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He slashed National Insurance, boosted Universal Credit benefits and put up the national living wage.
Some of the biggest changes Jeremy Hunt announced included:
However, a number of taxes including income tax, inheritance tax and stamp duty were not mentioned and will remain at their current levels.
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Here are the six things not changing after the Autumn Statement including stamp duty and inheritance tax.
Income tax and the personal allowance
The Treasury isn’t changing the rate of income tax or the personal allowance.
The freeze in the income tax bands will remain in place until 2028.
It means that average earners are still due to pay £124 more tax next year, despite £486 saving due to the National Insurance cut, according to Interactive Investor.
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Income tax is paid at different rates, depending on how much you earn – and some people pay nothing at all.
That’s because there’s something known as the personal allowance, which is an amount you can earn before you start paying income tax.
The personal allowance is the amount you can earn each year tax-free.
It can change from one year to the next and is set by the government.
In the current tax year – which runs from April 6 2023 to April 5 2024 – the figure is £12,570.
However, this amount may be bigger or smaller if you claim certain allowances.
And people with sight issues can get the blind person’s allowance, which increases this tax-free amount.
But you don’t get any personal allowance if you earn a very high salary.
Anyone earning over £125,140 a year pays income tax on all their earnings from the first £1 they make.
If you earn £12,570 or less, you currently pay no income tax.
On earnings between £12,570 and up to £50,270, you pay the basic income tax rate of 20%.
Wages of £50,271 and above are taxed at the higher rate of 40%.
And the additional rate of income tax, which applies to earnings above £150,000, is 45%.
Stamp duty
Stamp duty will remain unchanged after Jeremey Hunt failed to mention the policy in his Autumn Statement.
Stamp duty land tax (SDLT) is a lump sum payment you have to make when purchasing a property over a certain threshold.
Home buyers always pay the stamp duty, not the seller.
This is often done through a solicitor on your behalf as part of the buying process.
Home buyers have 14 days from the date of purchasing a property to file a return to HMRC with any stamp duty due.
Since September 2022, first-time buyers have not had to pay any stamp duty on homes costing less than £425,000.
They only have to pay it on properties costing more than this.
This figure was previously £300,000 but was increased by the then Chancellor Kwasi Kwarteng.
The maximum value of a property on which a first-time buyer’s relief can be claimed also increased from £500,000 to £625,000.
Under the previous system, no stamp duty was paid on the first £125,000 of all property purchases but the government has doubled that to £250,000.
The change in thresholds will end on March 31, 2025.
Inheritance tax
The Treasury isn’t changing its current inheritance tax policy even though it was rumoured to change.
Inheritance tax is paid on the value of someone’s estate after a person passes away.
The estate includes things like property, money and possessions.
Any inheritance tax due is calculated on the value of the estate on the date of someone’s death and is paid within six months.
There’s normally no inheritance tax to pay if the value of your estate is below the £325,000 threshold.
You can also avoid paying the tax if you leave everything above the threshold to your spouse, civil partner, a charity or a community amateur sports club.
If your estate’s value is below the £325,000 limit, you will still need to report it to HMRC.
If you give away your home to your children – including adopted, foster or stepchildren – or grandchildren when you die, your inheritance tax threshold can increase to £500,000. This is called the “main residence” band.
The standard inheritance tax rate is 40% – but it is only charged on the part of your estate that’s above the threshold.
ISA limits
The government is making some changes to simplify ISAs and provide more choice.
This is aimed to make it easier for people to choose the best ISA accounts for their needs and move money between them.
The government will allow multiple subscriptions to ISAs of the same type every year from April 2024.
It will also allow partial transfers of ISA funds in-year between providers from April 2024.
The government will also raise the account opening age for any adult ISAs to 18 from April 2024 – up from 16.
However, it is freezing the ISA annual allowance at £20,000, Junior ISAs at £9,000 a year and Lifetime ISAs at £4,000 a year.
An individual savings account (ISA) is a type of tax-free savings account.
Savers don’t pay tax on any savings interest earned.
The most common types are cash ISAs and stocks and shares ISAs, where your money is invested in the stock market.
Each year, everyone over the age of 16 gets an ISA allowance of £20,000.
This means that they can earn interest on their savings in a bank, building society or another financial provider, without paying tax.
The maximum amount you can put away for the 2022/23 tax year is £20,000.
Christmas bonus for those on benefits
The Christmas Bonus is a one-off, tax-free payment made automatically to people claiming certain benefits in December.
It aims to help people with extra costs over the festive period.
But the bonus has remained the same since it was introduced in 1972, while the cost of goods has increased considerably over the same period.
If the DWP’s £10 payment had been increased in line with inflation, it would now be worth around £113, according to the Bank of England’s inflation calculator.
However, the Treasury will keep the Christmas Bonus at its current rate.
You won’t receive the £10 Christmas bonus if you are only claiming Universal Credit, but you will if you also receive one of the following benefits:
- Adult Disability Payment
- Armed Forces Independence Payment
- Attendance Allowance
- Carer’s Allowance
- Child Disability Payment
- Constant Attendance Allowance (paid under Industrial Injuries or War Pensions schemes)
- Contribution-based Employment and Support Allowance (once the main phase of the benefit is entered after the first 13 weeks of claim)
- Disability Living Allowance
- Incapacity Benefit at the long-term rate
- Industrial Death Benefit (for widows or widowers)
- Mobility Supplement
- Pension Credit – the guarantee element
- Personal Independence Payment (PIP)
- Severe Disablement Allowance (transitionally protected)
- Unemployability Supplement or Allowance (paid under Industrial Injuries or War Pensions schemes)
- War Disablement Pension at State Pension age
- War Widow’s Pension
- Widowed Mother’s Allowance
- Widowed Parent’s Allowance
- Widow’s Pension
The bonus is expected to be paid from the first week of December.
The payment should show up on your bank statement as “DWP XB”.
Millions on benefits including Universal Credit will get up to £470 payment boost next year thanks to an uprating worth 6.7%.
Household Support Fund
Millions of hard-up households can claim free cash from their local council via the government’s Household Support Fund (HSF).
It was first launched in October 2021 to help Brits pay their way through winter amid the cost of living crisis.
Councils up and down the country got a slice of the £500million funding available to dish out to Brits in need.
It was then extended for a second time in the Spring Budget and for a third time in November to help those on the lowest incomes with the rising cost of living.
The DWP has confirmed a fourth extension of the scheme through to March 31, 2024.
The help you can get varies depending on who your local council is, as well as your personal situation.
But you may be able to get free cash and vouchers to help pay for things like heating your home or to cover costs of your weekly grocery shop.
If an applicant is already receiving benefits, these will not be affected by the HSF.
And, you do not necessarily need to be getting benefits to receive vouchers or funds from the HSF.
Every council will provide the means they feel best suit their area.
The HSF was not mentioned in Jeremy Hunt’s Autumn Statement.
