Autumn Statement 2023

Autumn Statement 2023

In the Autumn Statement, Chancellor Jeremy Hunt promised 110 measures to grow the economy.

The following tax-cutting measures were announced:

National Insurance

The Chancellor announced a reduction in national insurance rates for employed and self-employed people. Although the thresholds are unchanged, Class 1 primary (Employee) national insurance will be reduced from 12% to 10% from January 2024. This is charged on monthly income between £1,048 and £4,189. From April 2024, Class 4 (profit-related) national insurance for self-employed people has been cut from 9% to 8% on profits between £12,570 and £50,270 and the flat-rate weekly Class 2 contribution of £3.45 is being scrapped.

Full expensing for Businesses

For companies, the main tax change will only be of real benefit to larger companies. The temporary ‘full expensing’ of capital expenditure was scheduled to end in March 2026. That has now become permanent and allows companies to claim a 100% deduction against taxable profits for the cost of ‘main rate’ fixed asset purchases.

Tax cut for Hospitality, Retail and Leisure businesses

The 75% discount on business rates for businesses in the hospitality, leisure and retail sectors has been extended for another year.

Other measures announced included:

  • The main National Living Wage rate will be increased by 9.8% to £11.44 per hour from 1 April 2024 and the age threshold will be reduced by two years to 21.
  • Alcohol duty will be frozen for a further year, up to August 2024.
  • The state pension triple lock will be implemented in full, resulting in an increase in State Pensions of 8.5% from April, and despite rumours to the contrary, Universal Credit and other working-age benefits will rise by 6.7% in line with the September inflation rate.
  • The Chancellor announced a set of pension reforms intended to enhance the benefits for those saving for retirement.  Employees will be able to have contributions paid into a scheme of their own choice, rather than one selected by the employer.
  • The processing of planning applications will be sped up, with local authority fees being refunded where deadlines are not met.
  • £50m in funding was announced for apprenticeship schemes, to boost skills in engineering and other key sectors.
  • Welfare reforms will come into force in the latter part of next year. Individuals who have been unable to secure employment for more than 18 months, but are deemed fit to work, will be required to engage in work experience placements. Benefit claimants who either turn down employment opportunities or fail to collaborate with job centre staff will be required to re-register for benefits, resulting in a temporary suspension of their benefit access. Furthermore, there will be significant changes to the existing guidelines for recipients of benefits based on health conditions that prevent them from working.