The Chancellor announced several plans to help people increase their hours, move into work and extend their working lives. He said “those who can work, should”
‘Universal Support’ a new supported employment programme for disabled people and those with long-term health conditions. The government will spend up to £4,000 per person to find them suitable job roles which caters to their needs, supporting 50,000 places per year once fully rolled out.
‘Returnships’ – an apprenticeship targeted at the over 50’s to help older workers, giving them skills and support to find a path back into work. Mr Hunt said “it will makes existing skills programmes more appealing for older workers and focus on previous experience”.
In a surprise move the Chancellor Jeremy Hunt announced he is abolishing the pensions lifetime allowance. Mr Hunt said “the move would stop over 80% of NHS doctors from receiving a tax charge, which stood at £1 million.
“The NHS is our biggest employer, and we will shortly publish the long-term workforce plan I promised in the Autumn Statement. But ahead of that I do not want any doctor to retire early because of the way pension taxes work.” Mr Hunt told the Commons: “I have listened to the concerns of many senior NHS clinicians who say unpredictable pension tax charges are making them leave the NHS just when they are needed most.
He also announced the tax free annual allowance will be increased by 50% from £40,000 to £60,000. The MPA, the amount you can put into your pension once you start taking money out of it will rise from £4,000 to £10,000.
He added: “As Chancellor I have realised the issue goes wider than doctors. No one should be pushed out of the workforce for tax reasons.”
Income Tax & National Insurance
National Living Wage will increase 9.7% in April 2023 from £9.50 per hour to £10.42 per hour which represents an annual increase for a full time worker of £1,600.
The Chancellor has reduced the income tax additional rate threshold from £150,000 to £125,140 which will increase taxes for people on high incomes from April 2023.
Income tax, National Insurance and Inheritance tax thresholds will be maintained at their current levels until April 2028 which is a further two year freeze on top of the existing four year freeze.
Until April 2028 the thresholds will be:
Inheritance Tax – £325,000
Personal allowance – £12,570
National Insurance – Primary threshold £12,570, Secondary threshold £9,100 and Upper Earnings Limit £50,268.
Dividend rates have been halved by Chancellor Jeremy Hunt in the Autumn Statement. The dividend allowance will be cut from £2,000 to £1,000 from April 2023. From April 2024, it will be reduced further to £500.
Capital Gains Tax
The annual exempt amount for capital gains tax will be cut from £12,300 to £6,000 from April 2023. It will then be dropped further to £3,000 from April 2024.