Autumn Statement 2023

As you may be aware, the Chancellor delivered his Autumn Statement yesterday. This year’s statement was headlined as the ‘Autumn Statement for Growth’, with an aim to put £450 back into the pocket of the average worker and help grow the economy.

We have set out below some of the key tax developments that we think are likely to affect you and/or your business. 

Despite all the rumours in the press, there were no announcements or changes regarding the existing inheritance tax rules.


National Insurance Contributions:


The government is cutting taxes for over 29 million working people. Note that this tax cut won’t stop more people going into higher rate tax bands as wages rise. But these will help employees and self-employed people have a little more money in their pockets.

The changes they are making are:

  • Class 1 employee national insurance contributions (i.e. the national insurance rate that employees pay) will be cut from 12% to 10% from 6th January 2024. This means the average worker on £35,400 will receive a tax cut of over £450 per year.
  • Class 2 self-employed national insurance contributions – the NIC rate that self-employed people paid who DON’T pay their income tax via self-assessment – is being abolished.
  • Class 4 self-employed national insurance contributions – the NIC rate that self-employed people paid who DO pay their income tax via self-assessment – are reducing from 9% to 8% from 6th April 2024. The average self-employed person earning £28,200 will save about £350 per year in the new tax year.

What does this mean for you and your business:
It means that your employees are getting less money deducted from their salary. If also means that if your business is making more than £50k in profits, and therefore subject to a higher rate of corporation tax, it is worth considering how much you decide to pay yourself via PAYE and how much via dividends.

We will be holding review meetings with impacted clients to discuss their tax and remuneration planning for 2024-25 in February and March 2024.


National Living Wage:


From 1st April 2024, the National Living Wage will increase by 9.8% to £11.44 with the age threshold lowering from 23 to 21 years old. This represents an increase of over £1,800 to the annual earnings of a full-time worker on the National Living Wage.

What does this mean for you and your business:
It means that you need to check your salary rates, particularly for your younger employees and any low paid workers.


Full expensing on plant and machinery:


The full expensing scheme for companies, which originally came in for 3 years, is now being introduced permanently. 

What does this mean for your business:
For every £1 your company invests in plant and machinery; its corporation tax bill is cut by up to 25p.


Business rates reliefs frozen:


The small business rates multiplier will be frozen for another year and the 75% discount for retail, hospitality and leisure businesses will be extended for a further 12 months.

What does this mean for your business:
There will be no change to the amount of business rates that your business pays for the next 12 months. 


Research and development tax relief simplification:


The existing Small and Medium-sized Enterprise and large company R&D Expenditure Credit (RDEC) schemes will be combined into a single RDEC-style regime from April 2024.

The merged scheme will provide a taxable credit of 20% of qualifying R&D expenditure, although R&D intensive companies will continue to be able to claim a payable credit at the rate of 14.5%.


Creative tax reliefs:


These reliefs will be switched to expenditure credits from 1 January 2024, similar to the RDEC, with credit rates ranging from 34% for films, high end TV and video games to 39% for children’s animation.


Read the full statement here


If you would like to discuss any of these in further detail, or how they might impact you personally, please get in touch.