James Pinchbeck, partner at Streets Chartered Accountants, reflects on the Autumn Statement.
As our seventh Chancellor since 2016 stood up to deliver his Autumn Statement, perhaps the good news was that in contrast to his immediate predecessor, he had run his figures by the Office for Budget Responsibility. Therefore, we hopefully will not experience an aftershock.In the media coverage on the run up to his speech there was much speculation as to what the Statement might include, from reductions in business and income tax to changes in inheritance tax. Over recent days it has felt that at times they were testing the acceptance of any proposed changes, especially with the electorate, as we are now probably only 12 months away from a General Election.However, it did feel a bit akin to a Black Friday sale, with some 110 measures and announcements to underpin growth, make work pay and increase work/UK productivity. Overall, a move to hopefully revert the government’s fortune, curtailing the growing shift in support for Labour and perhaps a red wall landslide next year. Whether it will achieve this we will have to wait and see.Whilst as ever the devil is in the detail and it will certainly take time to get through the 110 measures, the key announcements and changes were as follows:
- The headline grabbing reduction in Employee National Insurance from 12% to 10% – this cut will come into effect from 6th January 2024
- For the self-employed Class 2 NIC will be abolished with Class 4 NIC to be cut from 9% to 8%
- Business Rates will continue to be frozen for small businesses and the 75% discount on business rates for retail, hospitality and leisure will be extended for a further year
- The National Living Wage will increase to £11.44 per hour from April 2024
- State pension payments are to rise by 8.5% to £221.20 a week, worth almost an extra £900 a year. The triple lock will be “honoured in full”
With business investment in the UK falling behind other OECD countries and with the need to improve productivity to underpin economic growth the announcement that full expensing for businesses to be made permanent must be good news. This will mean that for every £1 a business invests in IT, machinery and equipment they can claim back 25p in Corporation Tax.The Chancellor also announced further changes to Research and Development Tax reliefs aimed at supporting and driving innovation especially in the fields of life science, technology, advanced manufacturing, net zero and digital innovation.A number of our firm’s office locations are set to see a change in their political and governance landscape, with devolution deals announced for Hull and East Yorkshire and the counties forming Greater Lincolnshire.Further afield and including locations from across our practice there was news of the creation of further investment zones and that Freeports and investment zones will be given 10 years of “financial incentives,” rather than five as currently planned.There will also be a further three investment zones in the West Midlands, East Midlands and in Greater Manchester. And finally, whether you are looking to partake in a glass of wine, beer or whatever your tipple to celebrate or otherwise, you will be pleased to hear the duty on alcohol will be frozen until August 2024. For the devil in the detail there is still time to book for Streets Chartered Accountants’ post Autumn Statement webinar which takes place from 11am until 12noon on Thursday 23rd November. Register to join us live and/or to receive a post broadcast recording to watch on catch up.
