In his 2023 Autumn Statement to the House of Commons yesterday, Chancellor Jeremy Hunt announced tax reductions for businesses, employees, and self-employed individuals.
For businesses investing in IT equipment, plant and machinery, Mr. Hunt has decided to extend Full Expensing, which enables businesses to receive a 25p corporation tax rebate for every £1 they invest. Initially planned to last for three years, this tax cut has been made permanent, making it, according to the Chancellor, the ‘biggest business tax reduction in modern British history’, estimated to be worth £11 billion yearly.
A business rates support package designed to assist high streets and safeguard small businesses over the next five years was also unveiled. This package is valued at £4.3 billion and includes the extension of the 75% retail, hospitality and leisure relief.
The Chancellor announced that the main rate of employee national insurance contributions (NICs) will be slashed from 12% to 10% starting January 2024.
Changes were also made to NICs for self-employed individuals. Class 2 NICs, a fixed, compulsory charge of £3.45 currently paid by self-employed people earning above £12,570, will be abolished. Class 4 NICs for the self-employed will be cut from 9% to 8% starting April 2024.
The National Living Wage (NLW) will increase by 9.8% to £11.44 per hour for eligible employees starting 1 April 2024. The minimum age eligibility for the NLW was also reduced from 23 to 21 years old. This increase is expected to benefit more than 2.7 million low wage earners.
Read our detailed full summary of the 2023 Autumn Statement here.
|If you have any questions or need advice on any of the above points coming out of the 2023 Autumn Statement, please do not hesitate to contact us.