Making Sense of the Mini Budget: A Guide to Impacts on your Business and International Assignments

On Thursday 17 November, The Chancellor of the Exchequer, Jeremy Hunt, delivered the Autumn Statement 2022. In this time of significant economic uncertainty, Mr Hunt outlined his plans for the UK and the global economy in an attempt to fill the deep void in the government’s finances.

The chancellor stated his priorities are stability, growth, and public services, and he is providing “fair solutions” despite taking “difficult decisions.” In Mr Hunt’s plans, the underpinning theme for economic stability relies on fiscal sustainability. The 2022 Autumn Statement sets out the government’s plan to ensure that the national debt falls.

But what does it mean for businesses, particularly those with employees seconded overseas, or those coming to the UK? This blog, written by Scott Niven, Operations Director of IPM Global helps to make sense of it all.

The Autumn statement is broken down into the following key areas:

Growth, taxation and wages, cost of living support, government spending, energy, health and social care, climate, defence, innovation, infrastructure, borrowing and other measures. For the purposes of this article, we shall be looking at the first two points.


It has been forecasted by the Office for Budget Responsibility (OBR) that overall growth will hit 4.2% this year. Simultaneously however the size of the economy will reduce by 1.4%. The OBR also predicts the UK’s inflation rate to average 9.1% this year and 7.4% next year while unemployment is expected to rise from 3.6% to 4.9%.

The increasing inflation rate in the UK, is, inevitably, likely to see greater focus from assignees to the UK, on the level of their salary and Cost of Living Allowance (COLA). Intuitively, one would assume that this should increase. However, the exact situation will be different for each assignee, as the Cost of Living allowance is a factor of both prices in both the home location and the UK, and also the exchange rate used to calculate that COLA. If, for example, inflation in the home location is also around 9%, then the COLA may not move at all.

Likewise for assignees from the UK to overseas offices, whether the COLA increases or decreases, will be determined partly by relative levels of inflation at home and host.

Thus, Global Mobility teams should analyse the impact of the increasing UK inflation on the COLA’s for both these populations. This could see a material change in the allowance calculated and they should be ready to explain why an allowance may not be increasing at the same rate as local inflation.

The increased inflation is also pushing up the UK rental market, so housing allowances (where in place) should be reviewed. Availability of properties is likely to reduce as well and as a result, greater flexibility is required on the home search for International Assignments.

Taxation and Wages:

The UK minimum wage is set to increase for people over 23. This will go up from £9.50 to £10.42 an hour. The threshold for the 45p additional rate of tax will be cut from £150,000 to £125,140 and income tax personal allowance and higher rate thresholds will be frozen for a further two years until April 2028. National insurance and inheritance tax thresholds are also frozen until April 2028. Dividend allowances are to be cut from £2,000 to £1,000 as of April 2023 and then to £500 from April 2024.

The lowering of the threshold for the 45% tax rate will increase the cost of inward assignments to the UK. Most assignees are tax-equalised, (meaning the Company pays their UK tax costs). Whilst their salary in some cases may not be at this level, once the tax on other benefits such as housing is added in, the majority will have some taxation within the highest tax bracket. Existing assignments should therefore be re-costed to evaluate the impact of the tax threshold change.

For assignments from the UK, where a buildup methodology is used, a new UK gross-to-net calculation will be taken on 1 April 2023. Whilst, a salary increase may be given, the net impact will be eroded by the tax changes above. This may be material for those now earning above the new higher rate threshold, but all will see some impact due to the freezing of allowances/thresholds. This, when combined with the uncertain impact of COLA mentioned above, may lead to a result giving a minimal increase or even a reduction in salary overseas.

Again, Global Mobility teams need to be ready for the increased questions likely to arise and decide how they will deal with such situations

Our suggestions to prepare those within your company for the changes ahead are as follows:

● Work with your HR/Global Mobility team to come up with a fully comprehensive email detailing the changes within the budget and how it is expected to impact your assignees

● Notify staff of any changes to policies within the business such as hiring freezes for International Assignments whilst the impact of the budget is worked through

● Providing advice for those assignees who are concerned about the impact on their take-home pay whilst they are based overseas

To assist you with providing the relevant for your workforce and industry, IPM is always happy to help. We provide advice to companies wanting to develop, manage, and support their established mobility programs and for those entities with mobility aspirations that are making their first foray into the global workplace. We make it our mission to understand the implications of political change and how it will impact your business. This means we can take you on a journey of global mobility, wherever it may take you (and your assignees). Contact us today to find out more.

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