On Wednesday 22 November 2023, the Chancellor Jeremy Hunt delivered the Autumn Statement 2023. Here is our summary of the key points:
Personal tax
From 6 January 2024, the rate of National Insurance Contributions (NICs) on earnings of between £12,570 and £50,270 will reduce from 12% to 10%. The Chancellor says this will affect 28 million people, meaning a person on an average salary of £35,000 would save around £450.
Business tax
The ‘full expensing’ option for businesses to offset investment in items such as IT equipment and factory machinery against tax will be made permanent.
The Chancellor will abolish class 2 NICs for the self-employed which will count towards their state pension entitlements, which are paid by the self-employed at a flat rate of £3.45 a week. This will reduce taxes for 2 million people. Class 4 contributions will be reduced by 1% which are currently paid at 9% on profits between £12,570 and £50,270. From April 2024, this would fall to 8%. These initiatives will be worth £350 per year.
Wages and pensions
As announced prior to the Autumn Statement, the National Living Wage will increase to £11.44 per hour from April 2024. This will also be extended to 21 year olds.
The state pension will be increased by 8.5%. The Chancellor has unveiled an overhaul-up of the pensions system aimed at giving workers greater control over where they build their retirement funds. Pension savers will be given the opportunity to ask their employer to pay into a retirement fund of their choice.
Property
In an effort to ‘unlock the building of more homes’, the Chancellor says the Government will consult on new rules to allow any house to be converted into two flats provided the exterior is unchanged.
Economy
The Chancellor will invest an extra £4.5bn between 2025 and 2030 in manufacturing. Around £1m will go to aerospace companies and firms working on green technologies.
Investment
Individual Savings Accounts (ISAs) will be overhauled to allow savers to pay into multiple accounts of the same type from April 2024. The current £20,000 tax-free allowance will remain unchanged.
Inflation
Inflation is expected to fall by 2.8% by the end of 2024.
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