Chancellor Jeremy Hunt has today disclosed the specifics of his Autumn Statement in the House of Commons.
This comprehensive declaration outlines the government’s strategy for taxation and expenditure for the upcoming year.
The Autumn Statement is set to influence not only the net earnings and household budgets of millions around the UK, but also dictates the funding allocated to crucial public services.
Taxation/Wages
- The main rate of National Insurance will drop from 12% to 10% from 6th January.
- Class 2 National Insurance – paid by self-employed people earning more than £12,570 – abolished from April 2024
- From April 2024, the Class 4 National Insurance rate for self-employed individuals earning between £12,570 and £50,270 will drop by 1%, from 9% to 8%.
- National Living Wage to increase to £11.44 per hour from April which will also apply to workers aged 21 and 22.
Benefits and Pensions
- From April 2024, Universal Credit and and other working-age benefits will rise by 6.7%.
- Local Housing Allowance rates, which set the amount for housing benefits and Universal Credit used for rent payments, are set to be unfrozen. They’ll now go up to 30% of the local rent costs.
- £1.3bn allocated to assist job seekers with health conditions over the next five years.
- An additional £1.3bn will be dedicated to support individuals who’ve been unemployed for more than a year.
- If claimants are judged as capable of work but choose not to seek employment, they stand to lose their benefits and additional perks, like free prescriptions.
- Pension payments to go up by 8.5% from April in line with average earnings.
UK Economy and public finances
- Office for Budget Responsibility predicts a steady economic rise, from 0.6% this year to 1.7% in 2028.
- Inflation expected to slow to 2.8% by the end of 2024.
- The expectation is that underlying debt will rise to 91.6% of GDP next year, continuing upwards to 92.7% in 2024-25 and 93.2% in 2026-27. However, it’s then forecasted to drop back down to 92.8% by 2028-29.
- Borrowing forecasted to decrease from 4.5% of GDP in 2023-24 to 1.1% by 2028-29.
Business and Infrastructure
- The “full expensing” tax break, which lets businesses subtract the cost of new equipment and machinery from their profits, is now here to stay.
- 75% business rates discount extended for retail, hospitality, and leisure sectors for another year.
- Energy bill reductions are on the cards for households living close to new power infrastructures of up to £1,000 per year.
- £4.5bn is being set aside to draw investment into key manufacturing sectors. This includes green energy, aerospace, life sciences, and automobile production.
Other
- Alcohol duty frozen until 1 August next year
- A maximum of £7m over the coming three years for groups such as the Holocaust Educational Trust to combat antisemitism in educational institutions.
- An allocation of £5m will be provided to Imperial College and Imperial College Healthcare NHS Trust to establish a Fleming Centre dedicated to health innovations.
Keep an eye on our website for a full and detailed summary of the Autumn Statement.
| If you have any questions or need advice on any of the above points coming out of today’s Autumn Statement, please do not hesitate to contact us. |
