Jeremy Hunts autumn budget 2022 – what Agents and Landlords need to know: -
A Run Down of what you need to know from the Autumn Budget
Most will have heard the Chancellor warn that “everybody will be paying a little bit more tax” earlier this week, but here’s exactly what you need to take from Hunt’s Autumn budget released on Thursday.
Taxation and wages:
Threshold for top rate of income tax
The threshold for when the highest earners will start paying the top rate of income tax will be brought down from £150,000 per annum to £125,140. This means that those earning over £150,000 will pay just over £1,200 more a year in tax and will therefore have a reduced disposable income.
Tax thresholds frozen for a further two years, until April 2028
Income tax, national insurance, personal allowance, inheritance tax and higher rate threshold allowance thresholds will all be frozen until April 2028. This means that although the tax bands for income tax and national insurance will stay the same, more people will move into higher tax brackets as their wages increase in line with inflation, and thus people will end up paying more tax.
Freezing the inheritance tax threshold at £325,000 will also mean that more estates will become liable to inheritance tax as house prices and inflation increase.
National living wage increase
The national living wage will be increased from £9.50 to £10.42 for the over 23’s from April 2023. This will mean an annual pay rise of £1,600 for the average worker which is the largest ever increase in the UK’s national living wage. This will hopefully provide some financial reassurance for tenants receiving the national living wage.
Dividend allowance to be cut from 2023
The tax free dividend allowance is due to be cut in 2023 from £2000 to £1000, and will be cut further to £500.00 in 2024. This will impact landlords using limited company structures as they pay themselves dividends from their rental profits.
Capital gains tax relief allowance cut by over half
From 2023 the annual exempt amount for capital gains tax will be cut from £12,300.00 to £6000.00, and then further halved to £3000.00 from 2024. This news will be unwelcome to Landlords and second home owners looking to sell properties in their portfolio as capital gains tax is applied at a much higher rate for residential property.
Stamp duty cuts to remain for a limited time period
The stamp duty cuts announced in the previous mini-budget will remain in place for now, but only until March 31 2025. This means that the threshold of the price of a property before stamp duty is paid will stay at £250,000, up from the previous threshold of £125,000 - but now only for a time limited period.
Introducing a social housing sector rent cap
The social housing rented sector is expecting rent increases of up to 11% in the next year, and therefore the government have introduced a 7% cap on rent increases for social rents in 2023 and 2024. This should help tenants in social housing save around £200.00.
Employer national insurance threshold frozen
The employer national insurance threshold will be frozen until 2028, which will equate to employers paying more as wages increase and fall into higher tax brackets. This is key for letting and managing agents employing members of staff. However, the employment allowance will remain at its current higher level of £5,000.00, meaning that around 40% of business will pay no national insurance.
Energy measures:
The energy price guarantee will be extended for a further 12 months
Help for energy bills will be extended, but it will be less generous. The energy price guarantee will remain in place for a further 12 months from April 2023, but the price will increase to £3,000 per year for the average household meaning an average of £500.00 support for every household in the country.
There will be targeted support for the most vulnerable to the cost of living crisis
The chancellor will introduce the additional cost of living payments next year:
- £900 to households on means tested benefits
- £300 for pensioner households
- £150 for those on disability benefits
- £1 billion of funding for the household support fund, extending the support for a further 12 months
Support in line with inflation:
Benefits and pensions will rise in line with inflation
Means-tested benefits, including universal credit, and pensions will both rise in line with inflation. This will assist tenants receiving benefits and / or a state pension cope with the cost of living crisis.
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