The Chancellor announces the Autumn Statement. What does it mean for you?
The Chancellor Jeremy Hunt, has presented his Autumn Statement which he says is focused on growing the economy through reducing debt, cutting taxes and rewarding work. He stated that, ‘Our plan for the British economy is working, but the work is not done.’ This article will provide a summary of the measures announced. Do look out for a full report that will be sent to our newsletter subscribers in the coming days.
- The OBR says that the economy will grow in each of the next 5 years and debt as a proportion of GDP from 2027-2028 will reduce;
- Core inflation is now lower than half of countries in the EU, 2% target in 2025;
- From January, employee National Insurance contributions will drop from 12% to 10%;
- Business rates: extending 75% business rates relief for retail, hospitality and leisure until 2025 - freezing the small business multiplier;
- Cut to National Insurance contributions for the self employed. From April 2024, class 2 NIC will be abolished and class 4 will be cut from 9 to 8%.
Cost of living measures:
- Working age benefits will rise by the rate of inflation at 6.7% from April 2024;
- Increasing housing support for low income renters - announcement to raise the Local Housing Allowance across the UK and providing £120m to aid in preventing homelessness, in addition to £1bn+ already provided through the Homelessness Prevention Grant between 2022-25;
- Freeze on all alcohol duty until August 2024;
- The Pensions Triple Lock and Pension Credit will be protected and rise in April 2024 by 8.5%;
- Additional 10 million to fund mental health services for veterans.
- Government is committing to a further £50m for a 2 year apprenticeship pilot, to stimulate training in growth sectors;
- Energy security: announcement to expand the electricity grid to speed up clean energy projects and reduce the time it takes to plan and develop crucial energy infrastructure;
- Announcement of proposals that those living closest to new electricity infrastructure will receive up to £1k a year off their energy bills.
- Boosting foreign direct investment including a new Ministerial Investment group.
- Technology - The UK’s AI industry employs over 50 thousand people and contributed £3.7bn to the economy last year. There will be a further £500m investment to fund the next generation of supercomputers and AI innovation;
- Creative industries - The creative sector is worth £126bn a year to the economy. There will be additional tax relief for visual effects expenditure, to help attract more investment into the UK;
- Manufacturing – An announcement of£4.5bn to support UK manufacturing;
- Three new investment zones – Three newInvestment Zones in Greater Manchester, West Midlands and East Midlands.
Small business announcements:
- The extension of the 75% business rates relief for retail, hospitality and leisure until 2025 - freezing the small business multiplier.
- Cut to National Insurance Contributions for the self-employed. Class 2 National Insurance will be abolished from April 2024 and Class 4 will be cut from 9 to 8%.
- Full expensing will be made permanent. This means that companies that invest in the UK will reduce their tax by up to 25p for every £1 they spend on plant and machinery.
Back to work plan:
- Announcements to tackle unemployment, strengthen sanctions and reform the welfare system;
- The National Living Wage is set to rise to £11.44 from April 2024 and will be extended to those aged 21 and over for the first time;
- From January, employee National Insurance contributions will fall from 12% to 10%.
- Through the LIFTS initiative, the government will invest £250m to enable UK pension funds to back science and technology companies;
- Pension savers to benefit from innovative UK industries.
- The government is exploring options for a retail offer of NatWest Group shares as part of plans to reduce the government’s stake.
If you have any questions about what these announcements may mean for you or your business, please get in touch with your Swindells partner who will be able to advise you further.
Changes to UK company law: Economic Crime and Corporate Transparency Act 2023
New changes to UK company law are being brought in by virtue of the Economic Crime and Corporate Transparency Act 2023 (“ECCTA”). The aim of these changes is to tackle economic crime and improve transparency. Companies House has stated that its fees will increase to reflect its new functions and powers under the ECCTA. The measures are being brought in at different stages and dates.
Double cab pick ups to be classed as cars from 1 July 2024
For the last twenty years, private individuals have been able to run pick ups as company cars and pay significantly less tax on the benefit in kind, than if they were a regular saloon, hatchback or SUV. However, in note EIM23151 released on 12 February 2024, HMRC signalled its intention to rescind the tax break on all new pick ups ‘purchased, leased or ordered’ from 1 July 2024.
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