Autumn Statement 2023

Autumn Budget Statement at a Glance

Business Tax

The UK Chancellor of the Exchequer, Jeremy Hunt, has proposed making "full expensing" a permanent feature of business tax.

This will allow companies to offset their investment in new IT equipment and factory machinery against tax.

Hunt believes that these measures will help boost business investment by approximately 1% of GDP.

Additionally, he plans to reform the taxes paid by self-employed individuals by abolishing their "class 2" national insurance contributions, which are used to determine their state pension entitlements.

This will reduce taxes for approximately 2 million people. Furthermore, the "class 4" contributions will be reduced by one percentage point, providing a combined tax reduction of £350 a year.

Hunt's proposal also includes a £4.3bn business rates discount for establishments in the hospitality, retail, and leisure sectors.

Personal Tax

In recent news, there have been talks of a personal tax cut.

According to Hunt, the main 12% rate of employee national insurance contributions will be reduced by two percentage points to 10%.

This tax cut is set to take effect from the 6th of January 2024, as stated by the chancellor.

It is important to note that this change will impact 28 million individuals and result in an average salary worker saving up to £450.

This news is likely to be well received by many taxpayers, as it will provide some relief from the burden of high taxes.

Inflation

The spending watchdog has predicted that the rate of inflation will decrease to 2.8% by the conclusion of 2024.

This is a significant drop from the 11.1% rate that was recorded last year when Hunt and Rishi Sunak began their tenure.

Wages & Benefits

In a bold move, Hunt has unveiled his plan for the biggest set of welfare reforms in the past ten years, aiming to get 200,000 more individuals into work.

As part of his proposal, individuals who claim benefits will be required to undertake mandatory work experience if they fail to secure employment within 18 months. In addition, the national living wage will increase by over a pound an hour to £11.44 from April, and the age at which it applies will also be extended to 21-year-olds.

Moreover, benefits will see a 6.7% increase, and individuals who claim them will be subject to tougher requirements to actively seek employment. Furthermore, there will be an 8.5% increase in the state pension.

Finally, the local housing allowance, which has been frozen since 2020, will see an increase, with some households benefiting from an £800 measure.

Any questions, get in touch with us via at info@lhp.co.uk.