Jeremy Hunt, the Chancellor of the Exchequer, has delivered his Autumn Statement, and we wanted to keep you informed about what has just been announced.
We’ll provide more detailed insight over the coming days, but for now, here are the main headlines.
Taxes
- Employee National Insurance to be cut from 12% to 10% from January 6th 2024.
- Class 2 National Insurance charge for self-employed people earning more than £12,570 to be abolished from April 2024.
- Main rate of Class 4 self-employed National Insurance Contributions to be cut from 9% to 8% from April 2024.
- No change to Income or Inheritance Tax rates.
Pensions and savings
- Government to open consultation on pension pot reforms, so savers have a legal right to require a new employer to pay pension contributions into their existing pension. Employers should note that this would take some considerable time to implement due to the practical problems this presents.
- The flat rate state pension will increase by 8.5% from £203.85 to £221.20 a week from April 2024. The maximum paid to those who reached state pension age before April 6th 2016 is currently £156.20 a week, increasing to £169.50 a week.
- Pensions triple lock to be maintained.
- ISA limits frozen, but ISA rules to become more flexible. We will provide more detail on this in our full report.
- The Lifetime Allowance remains on track to be abolished in April 2024, via legislation in the Autumn Finance Bill 2023.
Living costs
- Up to £10,000 off electricity bills over 10 years for those living closest to new energy infrastructure.
- Duty rates on all tobacco products will increase by 2%, and duty on hand-rolling tobacco will go up by 12%.
- Alcohol duty to be frozen until August 2024.
Businesses
- Tax break allowing businesses to deduct the full cost of investing in machinery and equipment from their tax bill is now permanent.
- Tougher regulation on late payers to improve prompt payments to SMEs to be introduced.
- 75% discount on business rates for retail, hospitality and leisure firms extended for another year.
- New rules to encourage local authorities to fast-track major business planning applications.
- £500m to be invested in schemes to make the UK an “AI powerhouse”.
- Reforms to R&D tax reliefs to simplify and improve the system, which will combine the existing R&D Expenditure Credit and SME schemes.
Economy
- The OBR forecasts inflation will fall to 2.8% by the end of 2024, and reach the Bank of England’s 2% target in 2025.
- OBR predicts economic growth of 0.6% in 2023. This is higher than its earlier estimate of a 0.2% contraction.
- OBR has downgraded its growth forecasts for the next two years. The organisation expects growth of 0.7% in 2024, down from its earlier prediction of 1.8%. This will be followed by 1.4% growth in 2025, which is lower than its previous forecast of 2.5%.
Over the coming days, we’ll be taking a close look at what the Chancellor has announced and what it means for you.
We’ll share our conclusions with you in a detailed report, so keep an eye on your inbox.