Chancellor Jeremy Hunt announced several tax threshold freezes to help plug a £55 billion hole in the public finances if the Government wants to stay within its self-imposed rules on GDP and debt.

Talking to the House of Commons today (17 November), the Chancellor announced we would reduce the additional-rate tax threshold from £150,000 to £125,140.

The change means roughly 250,000 taxpayers will soon pay 45% on the portion of their earnings that are above £125,140, collecting £855 million more in tax by 2027/28.

The personal allowance of £12,570 will continue to be frozen at its 2021/22 level, but for two extra years until 2028. According to chartered accountant Richard Murphy, this will increase the tax burden by £400.

Hunt also announced Government plans to cut the capital gains tax allowance to £6,000 in 2023 and then to £3,000 in 2024, worth an extra £40m in revenue by 2027.

Inheritance tax thresholds will remain frozen for a further two years and will be legislated by the Government in the Autumn finance bill.

Hunt also announced the Government would stick with the triple lock on pensions, increasing the state pension in line with inflation, representing an increase of £870 from April 2023.

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