Today, chancellor Jeremy Hunt outlined his Autumn Statement and key decisions affecting the nation’s finances. Despite the Office for Budget Responsibility (OBR) downgrading UK economic growth forecasts for 2024 (1.8% down to 0.7%) and 2025 (2.5% down to 1.4%), Mr Hunt promised that his 110 measures announced today will “help grow the British economy”, which dovetails the reduction in inflation from 11.1% to 4.6%.
With cuts to National Insurance for 27 million workers and programmes to bring tens of thousands of more people into work, Mr Hunt said: “Taken together, we will increase business investment in the UK economy by around £20 billion a year over the next decade and get Britain growing”.
Here are our key takeaways from today’s Autumn Statement:
Corporate Tax
- Full expensing to be made permanent, meaning companies get tax relief on every £1 spent on IT equipment, plant and machinery in the year the expense is incurred.
- From April 2024, proposed plans to merge the SME R&D scheme (for small companies) with the RDEC scheme (for large companies) are to go ahead. This will bring in a new single scheme for all R&D tax relief claimants.
- New rules will also apply to R&D intensive SMEs from April 2024. This impacts companies with 30% of their total expenditure being qualifying R&D costs and allows them to claim an increased cash credit rate of 14.5%.
- An increase in rates for audio-visual creative tax reliefs. Film, high-end TV and video games will be eligible for a credit of 34%, while animated film & TV and children’s TV are eligible for a credit of 39%.
Personal Tax
- Employee’s National Insurance is to reduce by two percentage points from 12% to 10%, leading to a potential saving of £750 per year – this comes into force from January 6th, meaning employees will begin to benefit from the New Year.
- Class 2 National Insurance for the self-employed will be abolished entirely, saving £180 per year – effective April 2024.
- Class 4 National Insurance will reduce one percentage point from 9% to 8%, potentially saving £370 per year – effective April 2024.
- Minimum wage to increase from £10.42 to £11.44 for those aged 21 and over.
Pensions
- State pension will increase by 8.5% to £221.20 per week
- The Chancellor honoured the government’s commitment to the pensions triple lock.
Other
- A range of benefits will increase by 6.7% including Universal Credit and some disability benefits.
- The planned introduction of 30 hours free childcare for one and two-year-olds will go ahead as planned from April 2024.
- Alcohol Duty will be frozen until at least August 2024.
- Duty on hand-rolling tobacco will increase by 10%.
- A range of reforms will come into effect around planning laws, with some additional tweaks to permitted development rights.
- £500m more funding has been allocated for innovation centres, supporting the UK’s drive to become a leader in AI and Supercomputing.
As always, should you have any questions concerning today’s Autumn Statement, do not hesitate to contact your local Champion office.
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