Autumn Statement 2023

The often used phrase “a week is a long time in politics” is certainly true today, as only a short time ago the Chancellor said personal tax cuts were virtually impossible and yet on 22 November 2023 Jeremy Hunt released a total of 110 tax and other measures in his “Autumn Statement for Growth”. You do wonder whether it was the recently released inflation figures that caused the change of heart, or could it have been continued unhelpful polling figures and the need to go to the Country in the next twelve months or so?

There is a whole raft of policy papers and reports that have been issued by the government and so we have included what we think are the initial highlights in this article, there will no doubt be more articles to follow.

For businesses the biggest news was the decision to make permanent the full expensing for capital allowances. However, this is a measure that applies to companies only, not all businesses, that buy new and unused qualifying assets. The rate of allowance will depend on whether the asset is for the main pool or special rate pool. It should not be forgotten that the £1m Annual Investment Allowance is still available for businesses.

We are also promised legislation to merge the two current Research and Development Schemes for accounting periods beginning on or after 1 April 2024 and staying with R&D there will be improvements to the rate of payable tax credit for eligible small and medium sized enterprises.

The government will be reforming the audio-visual tax credits available for film, TV, and video games as well as extending the sunset clauses for both the Enterprise Investment Scheme and Venture Capital Trusts to 6 April 2035.

No announcement from a Chancellor would be complete without comments on tax avoidance and tackling the tax gap, and this time there will be tougher consequences for promoters of tax avoidance schemes and an increase in the maximum sentence for tax fraud from seven to fourteen years.

The minds of small business owners will have been focussed on Making Tax Digital where in December 2022 the government announced they would have more time to prepare for the introduction of MTD. As part of the Autumn Statement a report was issued on the outcome of the review into how this will operate.

The Chancellor announced that from 6 April 2024, the self-employed will no longer need to pay Class 2 National Insurance contributions, without any loss of entitlement to benefits (including the State Pension), and there will be a reduction in the main rate of Class 4 National Insurance from 9% to 8%.

In a final piece of good news, employees were not neglected with the main rate of Class 1 National Insurance being reduced from 12% to 10%, but with the added benefit that this should apply from 6 January 2024. There should be leeway for employers to make retrospective adjustments if they cannot update their systems ready for the January payroll.