As ever, the autumn statement was a much-anticipated event in the financial and economic calendar.
Many of the measures had already been hinted at but one or two surprises were thrown in for good measure.
With the top lines hailing more help for business, the self-employed, Britain’s work force and pensioners there’s plenty to digest.
Beatons Director Nick Marshall said:
“There were no great surprises in the Chancellor’s statement for SMES.
As anticipated, full expensing for tax purposes of certain capital expenditure was confirmed, however many SMEs already benefited from the £1m Annual Investment allowance, so this will potentially only impact on those who make substantial expenditure above this.
There were some rumours that National Insurance contributions may be cut, but we were not perhaps expecting it to be a 2% reduction for employees.
“Whilst this appears to be a positive saving for many employees, it is made against the back-drop of frozen NI and Income tax bands currently planned until 2028.”
There are some positives for the hospitality sector with the freezing of alcohol duties and the business rates relief discount retained, but I suspect they would have hoped for more, possibly some reduction in VAT rates for that sector, but these remain unchanged.”
Here’s an overview of the key points from the autumn 2023 statement – please do contact our experts if you need further advice about how any of these measures could affect you and your business.
National Insurance
Employee National Insurance contributions to be cut from 12% to 10%. This will come into force from January. The Chancellor said this will put £450 back into the pocket of the average worker earning £35,400 a year.
Self-employed National Insurance Cut
The rate of Class 4 NICs on all earnings between £12,570 and £50,270 will be cut by 1 percentage point , from 9% to 8% from April 2024. Further to that, the weekly Class 2 NICs – the flat rate compulsory charge which is currently £3.45 paid by self-employed people earning more than £12,570 - will effectively be abolished, with no-one required to pay from April 2024. Access to contributory benefits will be maintained.
Full Capital Expenditure Confirmed
The full expensing allowance has been made permanent after its success since being introduced in spring. The Chancellor hailed this the ‘biggest permanent tax cut in modern British history’.
Capital allowances are a type of tax relief for businesses, allowing a business to deduct some or all of the cost of an item from its profits before paying tax. This should boost investment and help at least some business sectors to grow as well as attract new business to the UK.
Further boost for pensioners
The triple lock has been maintained for pensioners and benefits will rise in line with inflation. This will see the state pension rise by 8.5%, in line with average earning.
National Living Wage boost
The National Living Wage will rise to £11.44 for those over 21 and is said to represent a boost of £1,800 to the average annual earnings of a full-time worker.
Support for hospitality
Pubs, restaurants, breweries and distillers were backed in the budget as alcohol duty was frozen for six months to August.
Late payment regulations and other support for SMEs
SMEs will be supported with tougher regulation on late payers to improve prompt payments. As expected the existing R&D Expenditure Credit and Small and Medium Enterprise Scheme will be merged from April 2024, simplifying the system and boosting innovation in the UK.
More information on measures in the Autumn Budget, including help for households can be found here and Beatons can advise further – please contact us on 01473699777 or email info@beatons.co.uk