Chancellor Jeremy Hunt announced his second Autumn Statement speech on 22nd November 2023 to parliament. He mentions 110 tax cuts and spending, support for working people, the self employed and small businesses, with a fiscal windfall of around £27bn to play with.
Find out how the measures will affect you and your business.
Some of the biggest announcements covered are:
Individuals
- National Living Wage (NLW) Increase; The NLW will increase from 1st April 2024 from £10.42 to £11.44, which will now be eligible for UK worker aged 21 and over.
- National Insurance cuts; The main rate of Class 1 National Insurance Contributions, paid by employees, will fall by 2% from 12% to 10% from 6th January 2024. For the Self Employed individuals the main rate Class 4 NIC and Class 2 NIC will be reduced by 1% from 9% to 8% from 6th April 2024.
- Benefits; Universal credit payments and other welfare benefits will be increased by 6.7% in April 2024, this means those who claim will received an additional l £470 a year for 5.5 million households.
- Pensions Triple Lock; The Chancellor has remained committed to the 'triple lock' on pensions meaning the pension payments will rise by 8.5% in April 2024.
- Housing and Private Rent; The local housing allowance rate will be increased to cover the lowest 30% of market rents. With an average support of £800 per household next year.
- Making Tax Digital for income tax self assessment (MTD ITSA) for landlords and self-employed; For those with income over £50,000.00 will come in first from April 2026, those with income between £30,000.00 and £50,000.00 will come in a year later in April 2027. It has now been confirmed those with income under £30K will not be brought into MTD ITSA for now.
- Clarifying tax deductibility for training: HMRC will update guidelines on the tax deductibility of training costs for sole traders and the self-employed, clarifying what counts as an eligible business expense.
Business
- Full Expensing For Businesses; Full expensing provides 100% first-year relief to companies on qualifying main rate plant and machinery investments including IT equipment.
- Business Rates Support Package; A £4.3bn business rates support package over five years was announced. This includes freezing the small business multiplier for the fourth consecutive year and extending retail, hospitality and leisure to continue supporting vulnerable businesses. This relief reduces qualifying business’ annual business rates liability by 75%, with a cap of £110,000 per business and has been extended for 2024/25.
- Alcohol Duty; freeze on alcohol duty.
- Pension Reforms and Investments; Pension reforms to unlock £75bn of financing for high-growth companies by 2030.
- Freezing small business rates: The Government continues its support by freezing the small business rates multiplier, reducing operational costs for SMEs.
- Addressing late payments: Stricter payment timelines for bidders on large Government contracts are being introduced to alleviate cash flow issues caused by late payments, a common challenge for SMEs.
- Enhancing digital adoption and skills: Expanding the 'Made Smarter’ program and the 'Help to Grow' initiative will assist SMEs in adopting digital technologies and enhancing management skills crucial for boosting productivity and growth.
- R&D Tax Relief Reforms; From April 2024, the current R&D expenditure credit (RDEC) for larger businesses and the SME R&D scheme for smaller enterprises will merge into one scheme. This will reduce the tax rate for loss-making companies from 25% to 19% and lower the threshold for additional support from 40% to 30%, expanding eligibility to about 5,000 more SMEs.
- Climate change agreement scheme extension; To support this transition, the Government is allocating £185m through the Industrial Energy Transformation Fund for energy-efficient technologies and offering around £300m yearly in tax relief under the new Climate Change Agreement scheme.
- Advanced manufacturing; Acknowledging the crucial role of advanced manufacturing sectors, the Government plans to invest £4.5bn in the automotive, aerospace, life science and green industries.
- Digital technology and AI; Substantial investments in artificial intelligence (AI) and digital technologies will help unlock domestic computing power for AI R&D.
- Life sciences; Life science businesses will receive increased funding for clinical trials, manufacturing investments in life sciences and genotyping.
- Creative industries; New funding and enhanced tax incentives for creative businesses, particularly for the visual effects sector, will be introduced to help grow the industry. This includes focusing on film and high-end TV production.
If you have any questions on how any area covered affects you or your business please don't hesitate to get in touch!
