UK Chancellor Jeremy Hunt has delivered his Autumn Statement to MPs on 22nd November 2023, in which he declared Britain’s economy is ‘‘back on track’’ but ‘’the work is not done’’.
The Autumn Statement is an update on the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility (OBR). It defines the government’s plans to help rebuild the economy, reduce debt, and restore the UK’s credibility with international markets. But how does this budget affect UK businesses?
In this blog we highlight the main points from the Autumn Statement which affect UK businesses, with analysis from Christine Lawless, one of our experts in the AVASK Accounting department.
- National Insurance contributions to be cut by 2% to a new rate of 10% as of 6 January 2024
- Class 2 National Insurance contributions to be abolished for the self-employed, saving the average worker around £192 a year
- Class 4 National Insurance contributions to be cut from 9% to 8%
- Temporary tax break known as ‘full expensing’ aimed at allowing businesses to offset any investments has been extended indefinitely
Whilst there has been little support this time around in reduction to taxes for businesses, the various tax cuts for employees and self-employed individuals will boost the economy, ease inflationary pressure, and incentivise public spending. It was thought that reductions to inheritance taxes and income taxes may have been announced in this statement, however, this has been potentially moved to Spring now.
Cost of living support
- National Minimum Wage will be increasing from £10.42 to £11.44 per hour from April 2024 for ages 21 and over.
- The National Living Wage will be increased by £1.11 to £8.60 per hour from April 2024 for ages 18-20.
- Universal Credit will rise in line with September’s inflation figure of 6.7% from next April. Universal Credit will benefit next year by around £800.
- State pension to rise to 8.5% from April 2024, in line with the triple lock commitment, worth up £900 a year.
The increased minimum wage along with new guidelines to be laid out for those that qualify for universal credits should incentivise many more to search for employment and therefore boosting the workforce and in return the economy. Furthermore, the increase in income across the board will boost spending.
- Treasury has announced a £320m plan to help unlock pension fund investment for technology and science schemes
- Alcohol duty has been frozen until August 2024
- A 75% discount on business rates has been extended for retail, leisure and hospitality businesses
- £4.5bn has been committed to green technology in a bid to keep Britain at the forefront of the global transition to net zero
Attention has been particularly paid to continuing to boost the businesses hit hardest in covid such as retail, leisure, and hospitality. There is also shown to be longer term growth plans for the country with attention and focus on technology and science.
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