Autumn Statement 2023: In Summary

22nd November 2023 | News

Chancellor Jeremy Hunt has this afternoon announced his Autumn Statement.

He has cut taxes for businesses with what he describes as the ‘biggest tax cut in modern British history’.

Hunt has also ushered in tax cuts for individuals, with the lowering of National Insurance payments from 12% to 10%.

We have summarised the main updates below:

Key points to know:

  • 2% cut to National Insurance from January. The main rate will be reduced from 12% to 10%.
  • Class 2 National Insurance abolished, and Class 4 National Insurance reduced from 9% to 8% from April.
  • 75% business rates discount for hospitality, retail, and leisure is being extended for another year.
  • £11bn ‘full expensing’ tax cut for businesses – these measures will increase business investment by £20bn a year – almost 1% of GDP.
  • Confirmation of the new merged R&D scheme.
  • Plans to make available £4.5bn over five years to attract investment into strategic manufacturing sectors – including money for electric cars and life sciences.
  • Three further investment zones in West Midlands, East Midlands, and Greater Manchester announced, and plans for an additional 12 in the spring.
  • £1bn of extra levelling up money available and there is £80m for projects in Scotland, Wales, and Northern Ireland.
  • National Living Wage to rise by almost 10% to £11.44 an hour.
  • The state pension will increase by 8.5%.
  • Changes to the rules for pension funds will give workers the right to require new employers pay pension money into an existing pension pot.
  • Inflation to hit 2% target in 2025 and is forecast to drop to 2.8% by the end of 2024, down from 4.6% recorded in October.
  • £50m will be available over the next two years to increase the number of apprenticeships in engineering and other sectors.
  • New rules to encourage local authorities to fast-track major business planning applications.
  • New requirements for companies bidding for large government contracts to pay invoices in 30 days.
  • Planning laws to be changed to make it easier to convert homes into two flats.
  • Benefits will be increased by 6.7%, in line with September’s inflation figure.
  • Housing allowance to be increased by an extra £800 next year.
  • All duties on beer, cider, wine, and spirits frozen until 1 August next year.

Summary

This year’s Autumn Statement has a noticeably more positive tone than Hunt’s bleak first announcement as Chancellor this time last year.

It has also turned out slightly more eventful than previously suspected, with cuts to National Insurance for instance not generally being predicted in advance.

The speech may have exceeded initial expectations in addressing the persistent demands for tax cuts from the backbenches.

However, Hunt refrained from declaring alterations to inheritance tax or a 1% reduction in income tax, contrary to widespread media speculation.

These potential changes may be reserved for unveiling in the upcoming pre-election Spring Budget. Watch this space…

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