Page 4 - Budget Newsletter November 2022

THE MAIN MEASURES

The Chancellor revealed a wide range of measures, raising an overall £55bn a year by
2027/28, with slightly under half coming from tax increases and the balance from
spending cuts. Mr Hunt had said a few days ago that everyone would pay more tax. As the
details below show, he was not joking.

Income tax

Personal allowance and tax band freezes

As was widely rumoured, the freeze on the personal allowance and higher rate threshold
which had been due to end after 2025/26 will now be extended for another two years. The
result will be more taxpayers and still more higher rate taxpayers. If you do not already pay
more than basic rate tax, you may do soon.

Paying more than basic rate...

7,000,000 21%
Higher/Additional Rate Taxpayers (LHS)
Proportion of all Taxpayers (RHS)
6,000,000 18%

5,000,000 15%

4,000,000 12%

3,000,000 9%

2,000,000 6%

1,000,000 3%

0 0%

Source: HMRC

Additional rate tax

Additional rate tax (initially at 50%) was introduced in 2010/11 on income of over £150,000.
The rate was reduced to 45% in 2013/14 (46% in Scotland where it is called the top rate),
but the threshold was never changed (until now). Unsurprisingly, the freeze means that the

Raymond James Budget Newsletter November 2022 3