04 Oct 2023 Autumn Statement
In his Autumn Statement, Chancellor Jeremy Hunt unveiled 110 measures to ‘grow the economy’.
He said it was a budget ‘for a country that’s turned the corner … an autumn statement for growth’, while Shadow Chancellor Rachel Reeves hit back, saying ‘growth has hit a dead end’.
Here, the team at Infinity Partnership summarise the main points of the 2023 Autumn Statement – 22 November 2023 …
- The income tax personal allowance, higher rate threshold (for rest of UK taxpayers) and national insurance thresholds remain frozen until April 2028 (as previously announced).
- From the 2024-25 tax year, individuals with income taxed only through PAYE, will no longer be required to complete a self-assessment tax return.
- From January 6th 2024, the main rate of Class 1 Employees National Insurance contributions will decrease from 12% to 10%.
- Class 4 National Insurance contributions for self-employed individuals will reduce from 9% to 8% from April 6th 2024.
- Class 2 National Insurance contributions will be abolished, saving self-employed people £192.40 per year. Self-employed individuals earning over £12,570 will still be entitled to the benefits from Class 2 contributions – such as the state pension. Those with profits between £6,725 and £12,570 will continue to get access to contributory benefits including the State Pension through a National Insurance credit. Self-employed individuals with earnings under £6,725 will still be able to pay Voluntary Class 2 National Insurance contributions to protect their entitlement to contributory benefits. The voluntary rate will remain at the current rate of £3.45 per week for 2024-25.
Capital Gains Tax
- The Capital Gains Tax annual exemption will reduce from £6,000 to £3,000 on April 6th 2024 (as previously announced).
- Full expensing, which was due to end in 2026, has been made permanent. This allows companies to claim 100% first-year deduction from profit before tax (50% for the special rate pool) on investments in qualifying new main rate plant and machinery.
- It was announced that the intensity threshold in the additional support for R&D intensive loss-making SMEs will be reduced from 40% to 30%. A one year period of grace will be introduced so that companies that fall under the 30% qualifying R&D expenditure threshold will continue to receive relief for one year. This will come into effect for accounting periods beginning on or after April 1st 2024.
- The existing Research and Development Expenditure (RDEC) and SME schemes are to be merged, providing relief at the current RDEC rate of 20%. Expenditure incurred in accounting periods beginning on or after April 1st 2024 will be claimed in the merged scheme. The notional tax rate applied to loss-makers in the merged scheme will be lowered from 25% as per the current RDEC scheme, to 19%.
National Minimum Wage
- From April 6th 2024, the national minimum wage will rise to £11.44, up from £10.42. It’s largest increase to date. The national minimum wage rate will also apply to 21 and 22 year old workers.
- The State Pension will increase by 8.5% from the April 6th 2024. This means that the full new state pension will increase from £203.85 per week to £221.20. The full basic state pension will increase from £156.20 per week to £169.50.
Please note that the Scottish Budget for 2024-25 will be published on December 19th 2023.