The Autumn Statement 2023
23 November 2023
The Autumn Statement 2023, presented by Chancellor Jeremy Hunt, brought some important updates for businesses and the self-employed. It’s a lot to take in, so we’re here to break down what these changes mean for you and your business. From national insurance adjustments to investment opportunities, we’ll cover the key points that matter. Whether you’re running a small enterprise or are self-employed, staying informed is essential, but it doesn’t have to be complicated.
Let’s walk through the Autumn Statement together, focusing on what’s important for your business’s growth and stability…
Corporation tax stability
In a move that brings a sigh of relief to many business owners, the Chancellor confirmed that there will be no further changes to corporation tax rates. This decision provides financial predictability, allowing businesses to plan ahead with confidence, focusing on growth and stability in a consistent fiscal environment.
Permanent full expensing scheme for capital investments
The ‘full expensing’ scheme for plant and machinery investment permanent. This allows businesses to immediately write off the full cost against taxable profits, supporting investment in growth and modernisation.
R&D tax credit reforms
Merging the R&D Expenditure Credit and SME schemes from April 2024, the reform reduces the notional tax rate for loss-making companies to 19%. This encourages innovation, benefiting businesses investing in research and development.
Global minimum tax compliance (OECD Pillar Two)
Starting December 2024, multinational enterprises will adhere to the OECD Pillar Two rule, ensuring a minimum 15% effective tax rate in every jurisdiction. This aligns with global tax standards and impacts multinational business operations.
Extended Investment Zones programme
The government is extending the Investment Zones programme in England from five to ten years, fostering long-term investment. New zones in Greater Manchester, West Midlands, and East Midlands offer businesses enhanced growth opportunities through various incentives and support.
Business rates support package
A significant £4.3 billion support package over five years has been introduced to aid small businesses, particularly in the Retail, Hospitality, and Leisure sectors. This includes extending 75% relief for these sectors for 2024-25 and freezing the small business multiplier, easing financial pressures.
EIS and VCT scheme extensions
The Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) reliefs, vital for attracting investments, have been extended to 2035. This move ensures continued support for businesses seeking growth through external funding, enhancing the investment landscape.
Changes in National Insurance Contributions
From January 2024, the main rate of employee National Insurance Contributions will be reduced from 12% to 10%, with similar reductions for the self-employed from April. This change increases take-home pay and reduces payroll costs, benefiting both employees and businesses.
Alongside the reduction in the main rate of National Insurance Contributions, there’s also a notable change for the self-employed with Class 4 NICs. From April 2024, Class 4 NICs will be reduced from 9% to 7% on profits between £12,570 and £50,270, and from 2% to 1.25% on profits above £50,270. This reduction will enhance the net earnings of self-employed individuals, providing a boost to their financial planning and overall income.
Pension and National Living Wage updates
The Autumn Statement confirmed the maintenance of the ‘triple lock’ on pensions, leading to an 8.5% increase in the full new state pension from April 2024. Additionally, the National Living Wage for workers aged 21 and over will rise to £11.44 an hour from April 2024, impacting wage structures for businesses.
Thrive with Simon & Co
Got questions about the Autumn Statement’s impact on your business? Reach out to Simon & Co. We’re ready to offer clear, practical advice to help your business thrive in these new conditions.