The Autumn Budget has been much maligned by a range of people, with higher earners and business owners feeling particularly disenfranchised.
These concerns are not unfounded, as the Budget has paved the way for a notable reduction in spending power, due to fiscal drag, that could result in more economic challenges in the future.
As such, it is vital that you learn how to make the most of your income in the face of the latest tax squeezes.
What did the Autumn Budget change?
While the Autumn Budget did change a host of things, it is more the things that did not change that are concerning.
Personal tax thresholds, which have been posing a challenge for many high earners for years, are set to remain frozen until 2031.
As inflation drives up figures without their commensurate value increasing, many people find themselves crossing into higher tax bands that see them face larger bills.
The result of this fiscal drag sees an overall reduction in spending power as more tax is paid on earnings without those earnings having the same financial impact they once did.
In fact, it is estimated that those with an average income of £103,700 will see a reduction in spending power of £15,658.
What can be done to lessen the tax squeeze?
In the same way that many high-net-worth individuals have had to rethink their estate planning to reduce potential Inheritance Tax (IHT) bills, it is time for high earners to consider new wealth management strategies.
Ahead of the 2027 changes, salary sacrifice is still a strong, tax-efficient option for those who want to be rewarded for their work without paying a hefty tax bill.
Just keep in mind that April 2027 will see a £2,000 limit to salary sacrifice pensions before tax kicks in.
Having a working knowledge of your finances will be imperative for keeping your tax bill low and our team can help.
We will work to understand your unique position and determine the most effective strategies that work for you.