The Chancellor has just delivered his Autumn Statement alongside the latest economic and fiscal forecast from the Office for Budget Responsibility (OBR).
With confidence, the Chancellor announced that the government has met their pledges to half inflation, lower the debt and have indeed, grown the economy – so much so the Chancellor can now give something back!
But what does this really mean?
For business owners:
- Making ‘full expensing’ for qualifying plant and machinery purchases permanent will soften the impact of the hike in Corporation Tax (and simplify Capital Allowance computations).
- For those who are self-employed, Class 2 National Insurance is to be abolished and Class 4 National Insurance reduced by 1% to 8% from 6 April 2024. Together the changes will mean an average total saving of around £350 for someone earning £28,000 a year.
- R&D tax reliefs will be simplified and improved to help drive innovation.
- A five year ‘business rates’ plan should support small businesses on the high street and those in retail, hospitality and leisure.
- There will also be targeted support for digital technology, green industries, life sciences, manufacturing and creative industries.
- Employees will see more in their pay packet from the new year after a reduction in Employee’s National Insurance by 2% from 6 January 2024 was announced. Those that earn an average wage of £35,400 will see an increase in their net pay of £450 a year. What a headache for payroll providers!
- Honouring the ‘triple lock’ commitment for pensioners, the state pension will rise by 8.5% next April.
Despite the rumours, no changes to Inheritance Tax were announced and the frozen income tax thresholds will drag more and more taxpayers into higher rates of tax. Although inflation has reduced, the cost of living is still high with numerous individuals having to negotiate new mortgage arrangements amidst high interest rates and first-time buyers are struggling to get themselves on the property ladder. Still, at least the duty on beer, cider, wine and spirits won’t increase for the next the nine months!
For more detailed in-depth analysis read our report or if you would like to a more personal discussion on how The Autumn Statement will impact you and your finances call CKLG on 01223 810100.