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Q&A: Have you got a question on how the Autumn Statement will affect your finances?

Chancellor of the Exchequer Jeremy Hunt departs Downing Street with his Autumn Statement for parliament in London, Britain, 17 November 2022 - TOLGA AKMEN/EPA-EFE/Shutterstock/Shutterstock
Chancellor of the Exchequer Jeremy Hunt departs Downing Street with his Autumn Statement for parliament in London, Britain, 17 November 2022 - TOLGA AKMEN/EPA-EFE/Shutterstock/Shutterstock

Jeremy Hunt set out his plan for the UK economy in the House of Commons on Thursday, unveiling £24 billion of tax rises, along with £30 billion of public spending cuts, as he said Britain must “face into the storm”.

The Chancellor's belt-tightening Autumn Statement included an extended freeze to thresholds and personal allowances for income tax, National Insurance and inheritance tax, which will leave millions worse-off.

Taxes are rising for everyone as the Government looks to plug a £50bn black hole in public finances, but how will they affect you and your wallet? How much more will you have to pay?

How will the Autumn Statement affect you? Our tax expert, Mike Warburton, pensions doctor, Kate Smith, Questor editor, Richard Evans, property correspondent, Melissa Lawford, founder of TheEnergyShop.com, Joe Malinowski and head of personal finance at investment firm AJ Bell, Laura Suter, were on hand to answer your questions on Friday November 18.

If you have a question that hasn’t been answered, you can send it to yourstory@telegraph.co.uk or comment at the bottom of this article and we will try and get it answered for you.


01:33 PM

Thank you for all of your questions

That’s all for today’s Q&A. Thanks to those of you who sent in a question and apologies if you did not get an answer to your questions this time. Fear not, if you’ve got a question that hasn’t been answered, you can send it to yourstory@telegraph.co.uk or comment at the bottom of this article and we will try and get it answered for you.

You can stay up to date with the latest information on pensions, property and more by signing up for free to our Money Newsletter here.


01:31 PM

How much will my Civil Service pensions increase?

Our final question this afternoon comes from Margaret and regards the changes to her Civil Service pensions.

Margaret asks I have two small Civil Service pensions, one of my own and one as my husband's widow; how much are these likely to increase? 

Kate explains: Public sector pensions, including civil service pensions, are increased in line with the Consumer Price Index at the previous September. This means that from next April, your pensions will increase by 10.1 per cent.


01:29 PM

Why do LPG gas users only get £200?

Next up is a question from Gwen on LPG gas.

Gwen asks: Why do people using LPG gas only get £200 and not £400?

Joe responds: Very good question. We suspect this is because the cost of alternative fuels has been based on how heating oil prices have changed. Although heating oil prices have risen, they have not increased by anywhere near as much as wholesale gas prices. LPG is of course different as the price of LPG is more directly related to global gas prices. It appears to us that, as a matter of convenience for government, they have lumped all these alternative fuels into a single pot and based the increase off just one price escalator. If you believe you have been materially disadvantaged by this (you may well have been), you may want to compile your evidence and write to your MP.


01:27 PM

Will the Autumn Statement affect my self-invested personal pensions?

Meanwhile, Telegraph reader Peter enquires about self-invested personal pensions.

Peter wonders: Do any of the new chances announced by the Chancellor yesterday affect my self-invested personal pensions? 

Kate replies: The good news is that the Chancellor didn’t announce any changes to pension tax relief so contributions you pay in will continue to receive a tax relief boost at your highest marginal rate of income tax. He also did not extend the current lifetime allowance freeze of £1,073,100 beyond April 2026. Although with inflation forecasted to continue to be at high levels for at least another year, before starting to fall away, the amount people will be able to build up in a pension without attracting an additional tax charge will be severely eroded in real terms by the time  the lifetime allowance freeze ends in 2025/26.


01:25 PM

Will I receive the triple lock on both my pensions?

Back to pensions now with a question from Victoria.

Victoria asks: I am a 70 year old pensioner and currently receive my old age pension as well as an extra pension due to opting to stay in SERPS, totalling £982 every four weeks. I pay 20 per cent tax on my small pensions. Will this remain the same? Will I receive the triple lock on both my old age pensions? Will the percentage be 10 per cent? 

Kate responds: The old basic state pension and the new State pension will increase in line with the triple lock from next April, and this has been confirmed by the Chancellor in his Autumn Statement.

The triple lock increases these state pensions by the highest of inflation, average earnings increases or 2.5pc. This means that your old basic State pension will increase in line with inflation at 10.1pc. If you are receiving the full old basic state pension of £141.85 per week, it will increase to £156.20 per week from next April.

Any additional pension, such as SERPS is increased in line with inflation, not by the triple lock. But next April, this means that it will also increase by 10.1 pc.  So from next April, all your State pensions will increase by the same amount.

There has been no change to the rates of income tax. However, the  thresholds or tax bands have been frozen for another two years until April 2028. This means that as your pension income increases, more of it will be subject to tax, but unless you cross a tax threshold, your rate of tax will be the same, at 20pc.  You will need to have pension income or earnings above £50,271 a year to pay the higher tax rate of 40pc.


01:21 PM

How will the Budget affect my income?

Telegraph reader Max is wondering how his income will be affected.

Max says: My total gross annual income, derived from two pensions - occupational and state - is £35k. How will the Budget affect my income? 

Laura responds: The good news is that your state pension income will rise from next April by 10.1 per cent. Thanks to the triple lock, the Government will increase state pension payments by inflation, meaning that if you’re on the full flat-rate state pension your income will increase from £185.15 per week to £203.85 per week. If you reached state pension age before 6 April 2016, you will be on the basic state pension and your income will increase from £141.85 per week to £156.20 per week.

However, on the flip side, you will face more tax over the next five years. It’s likely you won’t see an immediate hit to your take-home income, but you will experience so-called ‘fiscal drag’ where you gradually pay more tax than you otherwise would have thanks to the frozen tax thresholds. If the thresholds were linked to inflation you’d benefit from earning more tax-free income each year, but with the tax-free personal allowance frozen until 2027/28 you won’t benefit from that.

Someone on £35,000 today, who sees their income rise by average wage inflation each year, will face £2,557 more tax over the next five years, compared to a system where the tax thresholds increase with inflation. That’s because the personal allowance will be frozen at the current £12,570, but if it had increased with inflation each year by 2027/28 you’d be able to earn around £15,500 tax free each year.


01:19 PM

What is my tax liability as a pensioner solely reliant on pensions for income?

Telegraph reader Keith enquires about his tax liability.

Keith wonders: As a pensioner solely reliant on pensions for income - state pension plus private pensions - totalling circa a further £8k per annum, what will be my tax liability?

Kate answers: The personal allowance and higher rate tax thresholds were already frozen until April 2026, the Chancellor announced in his Autumn Statement that this freeze will continue for another two years until April 2028.

This means that the standard personal allowance will be fixed at £12,570 until then, and if your pension income is higher than this you will pay income tax. The higher rate tax band is also frozen at £50,271 a year until April 2028.

I’m unclear of your total income. I have assumed you retired before 6 April 2016 and  are receiving the old basic State pension at its full level of £7,376.20 a year plus a private pension of £8,000 a year. The old basic State pension will increase in line with inflation to £8,122.40 next April.

The first £12,570 is tax free, and this will continue to be the case until April 2028. Any amount above this, but below £50,271 a year, will be taxed at 20%.

Assuming your current income is £15,376.20 a year, your taxable income will be £2,806.20, which is taxed at 20%. This means that your tax liability would be £561.24  this tax year, which would be deducted from your private pension, not your State pension.

Next April, you will pay more income tax, as your State pension will increase and  your private pension may do so too, but the tax thresholds will remain the same.

The income tax rates and bands are different in Scotland.


01:17 PM

How will home owners who use oil for heating receive their £200 payments?

Another question on energy up next.

Pamela and Kenneth both ask: How will home owners who use oil for heating receive their £200 payments?

Melissa clarifies: You should receive it via one of the following routes. If you have an electricity supply - via your electricity supplier If you don't have an electricity supply - via the Alternative Fuel Payment Fund. That much we know.

What we don't yet know yet is how or when the electricity supplier will get the information from your fuel distributor, or what the mechanism is for claiming from the Alternative Fuel Payment Fund.


01:15 PM

Is the pension lifetime allowance still frozen?

More on pensions, Telegraph reader James enquires about the pension lifetime allowance.

James wondersWhat is happening to the pension lifetime allowance? Rishi Sunak froze it - has Jeremy Hunt extended that freeze? 

Kate clarifies: In his March 2021 Budget, Rishi Sunak, then chancellor, announced that the pension lifetime allowance would be frozen for five years at £1,073,100 until 5 April 2026. Fortunately, the current Chancellor, Jeremy Hunt, has chosen not to extend the freeze of the lifetime allowance for another two years, in line with many other tax threshold freezes. Although inflation is forecast to continue to be at high levels for at least another year, before starting to fall away, the amount people will be able to build up in a pension without attracting an additional tax charge will be severely eroded in real terms by the time the lifetime allowance freeze ends in April 2026. The lifetime allowance freeze is expected to impact thousands of savers over time.


01:13 PM

How do I access the £200 support as a heating oil consumer?

Colin now has a question for our energy expert, Joe. 

Colin says: I have an oil fired boiler and electric in my house. I note 'support' has been increased to £200 for heating oil consumers. 

 My electricity supplier has given no help in getting this support. Should they have offered a process of claiming? How do I claim this money?

Joe answers: I suspect the process is still being worked out and has not yet made its way to the front line of the electricity suppliers.

The electricity supply industry is regulated by Ofgem who should be involved in getting this set up.

If you struggle to get an answer from your electricity supplier, get in touch with Ofgem. They should be able to tell you what to expect and when.


01:11 PM

What are public sector pensions increasing by?

Now we turn to pensions with the help of our pensions doctor, Kate Smith.

Howard asks: As my private pension is now worth 12 per cent less than it was one year ago, I would like to know what public sector pensions are increasing by. 

Kate responds: It sounds as though your pension is a defined contribution pension so its value will depend on the contributions paid in, investment growth and charges deducted. These types of pensions have been impacted by the investment volatility we’ve seen in stocks and shares since the beginning of the year and lately by the fall in the value of government gilts.

Public sector schemes tend to be defined benefit schemes where retirement income is related to salary. Investment volatility doesn’t directly impact members of these schemes. Pensioners of these schemes  receive a guaranteed pension for life along with guaranteed pension increases.

Public sector pensioners are in a fortunate position as their pensions are generally increased in line with the Consumer Price Index at the previous September. Some public sector pensioners get annual increases above the CPI. For example, some NHS pensioners receive pension increases of CPI plus 1.5pc while the police receive CPI plus 1.25pc. This means that from next April public sector pensioners will benefit from a pension increase of at least 10.1pc in line with the September CPI.


01:06 PM

Why is the energy price cap rising when wholesale gas prices are falling?

Elsewhere, Telegraph reader William has a question on energy price caps.

William wonders: Why is the energy price cap rising when wholesale gas prices are falling?

Melissa explains: While it is true that both wholesale gas and electricity prices are falling, and indeed have fallen substantially (gas by 65 per cent and electricity by 75 per cent since the panic induced peaks of August 2022) they are falling from very high levels indeed. Which means that even after the recent falls, the new Energy Price Guarantee level is still lower than energy bills would be if they were priced off wholesale markets.

Having said that, the gap between market based energy prices, and the £3,000 Energy Price Guarantee (EPG) from 1 April 2022, has narrowed substantially. If the trend continues it is possible that market based prices may fall below the new EPG level in which case customers will, once again, be better off switching. Provided of course that Ofgem pulls its proverbial finger out and works on getting the competitive market working again.


01:03 PM

Do I have to pay capital gains tax if I put my income generated from a buy-to-let property into my pension?

Next, we have a question from Gillie.

Gillie describes her situation: I have a buy-to-let I use for income generating purposes. I have just got divorced and have a huge shortfall in my pension. Do I still need to pay CGT if I put the money straight into a pension? 

Laura answers: Put simply, yes, will still have to pay Capital Gains Tax. But there are a few things to be aware of here. Let’s take the Capital Gains Tax first. If you sell the buy-to-let you’ll face the higher rate of Capital Gains Tax on any gain you’ve made on the property. That means you’ll pay 18% tax if you’re a basic-rate taxpayer and 28% tax if you’re a higher rate taxpayer.

Everyone gets a tax-free allowance each year before they have to pay Capital Gains Tax. Currently that’s £12,300 but it’s being cut to £6,000 from next year and £3,000 from April 2024. That means if you’re planning to sell up there’s a tax incentive to doing so before April next year, as you’ll get an additional £6,300 of your gain tax free. For a higher rate taxpayer that’s a saving of almost £1,800 in tax.

If you have any losses on investments from this year or previous years you can use these to offset the gains you’ve made on your property. You will have needed to report these losses to HMRC, so check out the rules around this if you think it might apply.

You could put the proceeds from the sale into your pension, to plug your shortfall. You’ll still have to pay CGT on the money but you will benefit from income tax-relief on the money you pay into your pension. However, most people can only pay up to £40,000 a year into your pension. If the property was worth a lot of money, you might have more money than you can put into a pension in one year. You also can’t put more money into your pension than you have earned in that year. So if you wanted to put the full £40,000 into your pension pot you would need to have earned £40,000 or more in that tax year.

One option if the proceeds from the house are larger than your annual pension limit is to use ‘carry forward’. This is where you use up unused pension allowances from previous years, and you can go back up to three tax years. There are rules around this and it might be best to seek financial advice if you want to go down this route.


12:58 PM

Is this a good time to buy a house?

Now, Melissa Lawford answers an important question on a lot of people’s minds:

Oladimeji asks: With the projected increase in mortgages is this a good time to buy a house?

Melissa replies: It is the big question everyone is asking! I think that the answer, broadly, is no. But everything depends on your personal circumstances.

House prices are going to fall – it is feasible that I have missed one, but I cannot think of a single forecaster who is expecting otherwise. As far as I can see, most are expecting a drop of around 10pc. The Office for Budget Responsibility yesterday forecast a 9pc fall. I think London, where squeezed affordability means the market is much more dependent on mortgage borrowing, is going to see larger drops than the rest of the country.

This means that if you buy now you could lose money if you want or need to sell before house prices recover. But you have to weigh this up against the alternative. If you want to buy now, my advice is to calculate how much money you would lose if values fall by, say, 10pc, add that to how much you would have paid in mortgage interest over the period of ownership, and compare that figure to how much money you would have paid in rent over the same time frame. If the numbers are pretty close, it still makes financial sense to buy. If you are planning to live in the property for a long period of time (e.g. more than five years), you are also likely to be able to weather a downturn and see house prices recover again.

If you are buying with a small deposit, however, the calculation becomes more complex because, if house prices fall, you will be at risk of getting into negative equity. This means your home will be worth less than you borrowed to pay for it. If you have to sell up, you will owe your mortgage lender the difference. But the bigger problem, which is less talked about, is that you could find you are unable to remortgage when you come to the end of a fixed-rate deal. This means you would get pushed onto a product transfer or a standard variable rate deal, which are typically more expensive.

You mention a projected increase in mortgage rates. I’m not convinced that rates will rise higher than they are now (they have been declining slowly but steadily since the mini-Budget was scrapped) – but that will now depend on what happens to gilt yields and the Bank Rate.

Regardless, the days of cheap debt are certainly over. Some analysts are predicting declines in mortgage rates towards the end of 2024, but they will not get close to the levels we saw last year. The end of 2024 is also the time when a lot of forecasters anticipate the trough of house price declines. My take is that there could be a small window then when homes are cheaper in proportion to earnings and rates are becoming more affordable.


12:54 PM

What will happen with National Insurance once I reach state pension age?

Now for a question from reader Jay.

Jay asks: I am a higher rate taxpayer and reach pension age of 66 next year. I plan to carry on working until I'm 70. Will I stop paying NI after my 66th birthday? I'm planning on deferring my pension until I stop work. Will this make a difference to whether I pay NI? 

Laura responds:  There has been a lot of change in this area, so it’s understandable that you’re not certain what will happen with National Insurance once you reach state pension age. Historically you stopped paying National Insurance once you hit state pension age, meaning that you didn’t pay it on any pension income nor did you pay it on any earned income.

However, then the Government introduced the Health and Social Care Levy, which added 1.25 percentage points onto people’s National Insurance payments. And crucially, they decided that pensioners shouldn’t be exempt from the tax. It means that those over state pension age would pay National Insurance on their earnings for the first time. Any pensioners still in work and earning over the threshold, which was around £9,500 at the time, would pay the new levy from April next year.

But that plan has now been scrapped. As part of Liz Truss’s mini-Budget she ditched the Health and Social Care levy and said it wouldn’t be brought in next year. After all of this back-and-forth we’re now back where we started, which means that you won’t pay any National Insurance on your earnings once you reach state pension age. You’ll just need to check with your employer that they are aware of your age to make sure you stop paying it.

The exception is if you’re self-employed and so pay Class 4 National Insurance contributions, in which case you have to carry on paying them until the end of the tax year in which you reach state pension age.


12:52 PM

How does a stamp duty cut help house buyers?

Moving on, Telegraph reader William has a question on stamp duty.

William wonders: How does a stamp duty cut help house buyers? It just means they can offer more for a house as they do not have to pay stamp duty. Therefore, house prices remain as high and buyers will still have to budget for paying the same total amount. Surely the Treasury loses income?

Melissa explains: You raise a good point. Certainly, during the pandemic stamp duty holiday, house prices rose by more than buyers saved in tax.

But there are two things to bear in mind here. First, buyers pay stamp duty in cash. Generally, by contrast, they pay for their house with a mortgage. If the stamp duty bill is cut, but the house price is higher, the buyer will pay for the higher house price over the course of their mortgage repayments, but their upfront moving costs are lower. This can be key for buyers who were already struggling to save up the cash for a deposit.

The second point is that, personally, I’m not sure that I would really call this stamp duty cut a cut. Tax-free allowances for other types of tax are normally routinely adjusted to account for things like wage growth and inflation – and of course, a large part of Mr Hunt’s fiscal statement was freezing many of these allowances to raise tax by stealth. But before Kwasi Kwarteng raised the nil-rate stamp duty band from £125,000 to £250,000 in September, it had been the same since 2006. This means there had been no adjustment to account for the fact that, since then, house prices had climbed by about 81pc.

Because stamp duty is taxed in bands, increases in house prices bring disproportionate increases in stamp duty bills as properties get dragged into higher tax bands. In England, in the year to September, house prices rose by 9.6pc. Based on the tax bands before the mini-Budget, that meant the stamp duty bill on an average home had jumped by 31pc.

If the stamp duty bands are always fixed, it is a very significant stealth tax – but one which makes it increasingly hard to move house. Raising the nil-rate band to £250,000 brought it roughly in line with house price growth since it was last adjusted, but the Chancellor did not adjust the higher bands, meaning stamp duty still costs buyers far more proportionately to what it used to.

With regards to the outlook for Treasury income – I would argue that if Mr Hunt had not maintained the higher nil-rate band for the next few years, transactions would fall even further than they are currently forecast to. In turn, that would have further reduced the Treasury’s tax take.


12:48 PM

How will my ISA income be affected?

Likewise, David has a question on ISAs.

David asks: How will income from ISAs be affected?

Richard responds: Income from ISAs will remain tax free without limit.


12:47 PM

Is my ISA affected by the dividend tax?

A couple of similar rapid fire Q&As up next.

Richard Robinson asks: Are stocks and shares held in an ISA subject to the dividend tax?

Questor editor Richard Evans says: No, dividends are tax free inside an ISA without limit.


12:43 PM

Do additional payments such as Winter Fuel Payments count as income?

Telegraph reader Stella questions whether she needs to declare Winter Fuel Payments when doing tax returns.

Stella’s question to LauraI'm a pensioner - as is my spouse. Do we have to declare these additional payments (Winter Fuel Payment) as part of our incomes when we do our tax returns or don't they count as income? 

Laura’s answer: Lots of households will be getting additional help from the Government to help with the cost of living. Pensioner households will get a boost to their Winter Fuel Payment this year, while those on pension credits will get an extra £650 and anyone in receipt of attendance allowance or certain other disability benefits will also get another £150. On top of that many will have got the council tax rebate earlier this year, of £150, and everyone is getting £400 off their energy bills. If you’re entitled to all of these it can add up to a significant sum.

However, the payments are not taxable and so don’t have to be declared on your tax return. In addition, the payments don’t count don’t count toward the means test if you’re on any income-related benefits, so you don’t need to worry about tipping over any thresholds and losing your entitlement. The Government has just announced a new raft of cost of living payments for next year and we’d assume they will keep the same rules for them – that they are not taxable.


12:37 PM

Is child benefit rising in line with inflation?

Jason wonders how the new Autumn Statement will affect child benefit.

Jason asks: Benefits are rising next April in line with inflation, but does this include child benefit?  

Laura explains: From April next year Chancellor Jeremy Hunt has pledged to raise many benefits in line with the inflation figure of 10.1 per cent. This includes child benefit, meaning families will get a larger payout each year to help towards the cost of having children. If you have two children you currently get £36.25 a week in child benefit, but this will rise to £39.90 – meaning parents can get up to £2,074.80 a year.

However, one thing to be aware of is that while wages are rising significantly, the Government hasn’t increased the point at which you start to lose child benefit. The ‘Child Benefit High Income Charge’ means that as soon as one parent starts to earn more than £50,000 they will lose some of the benefit, until it’s entirely wiped out once you earn £60,000. If you’re near the threshold and get a pay rise or bonus this year, you need to be aware that you might tip over. You can put money into your pension to bring your income back below the threshold, if you can spare the cash.


12:29 PM

Will windfall taxes apply to companies that are not UK-based or UK-owned businesses?

Helen has a question on windfall tax. Joe Malinowski, founder of TheEnergyShop.com, weighs in.

Helen wants to know: Does the 45 per cent windfall tax on electricity companies apply to companies that are not UK-based or UK-owned businesses? 

Joe says: The windfall taxes will apply to profits earned in the UK. It doesn't matter whether the company is owned by overseas investors. What matters is where the profits are made. Generally, overseas based businesses will set up UK subsidiaries in order to operate in the UK. It will be the profits of those UK based subsidiaries that will be subject to the windfall tax.


12:26 PM

Do I have to pay both capital gains tax and inheritance tax?

Another question on tax from reader Keith.

Keith wonders: I am 76 and used my savings at retirement to buy two properties which provide a rental income sufficient to produce a reasonable pension. The two houses have increased in value over the past 14 years by around 60 per cent, which equates to about £280,000. Upon my death, will both capital gains tax and inheritance tax be paid on the same amount?

Mike explains: It looks as though you made some sensible investments Keith. The good news is that there has been no change to the current rule that there is no capital gains tax at death. In addition, the beneficiaries of your estate will receive the properties at the market value at death for the purposes of capital gains tax on any future disposal. The properties will, however,  be part of your estate for inheritance tax


12:22 PM

Can I convert shares into an ISA before the new changes take place?

Now, Telegraph reader Kate requires some help from our Questor editor, Richard Evans.

Kate asks: I am a pensioner. I inherited some shares which pay dividends which will in future become subject to the dividends tax. The only paperwork I have is from the solicitor who handled the will. Can I convert these into an Isa before the change takes place and if so practically how do I do it? Do I inform the companies, or what? I think what the solicitor did was just change the ownership details with the British companies concerned which are footsie companies. 

Richard explains: You can transfer the shares to an ISA, although whether you can transfer all of them within a year depends on their value and how much of your ISA allowance you have left. If they are worth more than your unused Isa allowance this year you can stagger the transfer over two or more years.

You will need your share certificates to make the transfer, unless the shares are already held in electronic form by a stockbroker. The process is rather long winded unfortunately.

Some stockbrokers, such as Hargreaves Lansdown and AJ Bell, offer an Isa transfer service. You can download a form from their websites, fill it in and post it to the broker with your share certificates. Alternatively you can phone the broker to request the forms. The broker will sell your shares and then repurchase them on your behalf within an electronic share dealing account. You would then need to sell them, set up an Isa and use the proceeds to invest in the same shares from within your Isa.


12:19 PM

Do farmers who already qualify for Agricultural Property Relief and Business Property Relief continue to do so?

Telegraph reader, Tom, has a question on Agricultural Property Relief.

Tom asks: Regarding businesses and farms and development land, has the only alteration to Capital Gains Tax been the reducing of the exemption to £3000? Have there been any other alterations to inheritance tax other than the freezing of the thresholds? I'm particularly concerned about owner occupied farms and farm houses. Has anything changed that affects Inheritance Tax, Annual tax, free gifts, etc? Do farmers who already qualify for Agricultural Property Relief and business property relief continue to do so?

Mike responds: Tom, as far as I can see from the statements issued yesterday there have been no changes announced on Inheritance Tax or development land as such. In particular I have seen nothing on Agricultural Property Relief for Inheritance Tax. As you say, there have been changes to Capital Gains Tax with the reduction in the annual exemption from £12,300 to £6,000 next April and to £3,000 the following year.


12:16 PM

Why is “unearned” income such as dividends going to be taxed?

Now we have another question on dividends from Fabian.

Fabian’s question to Mike: Could someone explain why "unearned" income such as dividends is going to be taxed away to oblivion, when many who pay themselves through a small limited company rely on such dividends from the profits that they helped their business "earn"? 

Mike says: I regret, Fabian, that this chancellor, and his predecessors, have chosen to hit small business owners hard with successive reductions in the dividend allowance. This was £5,000 in 2016 but now set to reduce from the current £2,000 to £1,000 from next April and then halve again a year later. Dividends are, of course, paid out of profits that have already been reduced by corporation tax, so by virtually eliminating the allowance it has now become double taxation. I am not sure whether this is because that assume that anybody who receives dividends is wealthy or because HMRC think it is some kind of loophole to save National Insurance. Either way it is extremely harsh on business that are already struggling to emerge from the pandemic.   


12:10 PM

Will I have additional CGT to pay on assets already sold in this tax year?

Peter has a question on capital gains tax.

Peter would like to know: Will I have additional capital gains tax to pay on assets already sold in this tax year prior to the Autumn Statement?

Richard says: No, this tax year’s allowance is unaffected; it will fall in the 2023-24 tax year and again the following year.


12:05 PM

Do the measures announced affect my tuition fee loan repayments?

Meanwhile, Amar has a question on student loan repayments. Laura Suter, who is head of personal finance at investment firm AJ Bell, answers.

Amar’s question to Laura: How will the measures announced in the statement affect tuition fee loan repayments for students?  

Laura responds: There were no changes announced to student loans in the Autumn Statement, so the system will remain as it is. There are already plans to make big changes to the student loan system that come in September next year that will make it much more expensive for some people to go to university. The new regime has a lower repayment threshold, a longer repayment period of 40 years before the loan is wiped out and a lower interest rate. The Government hasn’t said anything about reversing those changes, despite them costing students far more, so it’s unlikely they will backtrack on them.


12:01 PM

Will tax thresholds on dividends change?

Our first question comes from Abe who has a question on the changes to the tax thresholds on dividend payments

Abe asks: I am a small business owner and pay myself in minimum wage up to tax threshold then quarterly dividends. Will tax thresholds on dividend payments change as a result of the Budget changes? 

Mike responds: Yes, unfortunately they will Abe. Small businesses are the life blood of our economy but I am afraid that such business owners have been hit hard in this budget. It is entirely sensible to obtain the commercial protection offered through trading in a company. It is also sensible to take a fairly low wage and then top it up with dividends as business circumstances allow.

The current dividend allowance of £2,000 is set to reduce to £1,000 from next April and halve again one year later to £500. This compares with an allowance of £5,000 when it was first introduced in 2016. Until then dividends were effectively given a basic rate tax credit in recognition of the fact that the company had already paid corporation tax on the profits. Sadly, successive chancellors have cut away at the allowance to raise tax, conveniently overlooking the fact that it is not only wealthy investors who receive dividends. Dividends are also a common feature of the financial return taken by owners of small businesses.


11:47 AM

Q&A is starting in 10 minutes

Hello all. This Q&A will be getting underway in just 10 minutes. Our tax expert, Mike Warburton, pensions doctor, Kate Smith, Questor editor, Richard Evans, property correspondent, Melissa Lawford, founder of TheEnergyShop.com, Joe Malinowski and head of personal finance at investment firm AJ Bell, Laura Suter, are on hand to answer your questions on how the Autumn statement will affect you.