Autumn Statement 2023: Key Takeaway

23 November 2023|Related :

Yesterday, Chancellor Jeremy Hunt presented his Autumn Statement in the House of Commons, outlining the government’s tax and spending plans for the year ahead.

Keep reading to find out the main measures.

Tax and Wages

  • The main rate of National Insurance (NI) will be cut from 12%  to 10% as of 6 January 2024, affecting 27 million people.
  • Class 2 National Insurance paid by self employed people earning over £12,570 will be abolished from April 2024.
  • Class 4 National Insurance for the self employed paid on profits between £12,570 and £50,270 will be cut from 9% to 8% from April 2024.
  • National Living Wage to increase from £10.42 to £11.44 an hour from April 2024.
  • From April 2024, workers aged 21 and over will be entitled to the National Living Wage (currently only those aged 23 and over are entitled.)

Benefits and Pensions

  • In April, universal credit and other working-age benefits will increase by 6.7%, in line with September’s inflation rate.
  • Local Housing Allowance Rates, which determine how much housing benefit and universal credit people receive, will be unfrozen and increased to 30% of local rents from April.
  • Work Capability Assessment will be reformed to reflect the availability of working from home following the pandemic.
  • £1.3bn of funding will be spread across the next five years to help individuals with health conditions to find jobs.
  • A further £1.3bn will be used to help those who have been unemployed for over a year.
  • Individuals deemed able to work who refuse to seek employment will lose access to their benefits and extras such as free prescriptions.
  • In line with average earnings, state pension payments will increase by 8.5% from April.

Economy and Public Finances

  • The Chancellor announced 110 measures in the package which are aimed at boosting economic growth.
  • The Office for Budget Responsibility (OBR) has estimated that the economy will grow by 0.6% this year and 0.7% next year.
  • Inflation is estimated to fall to 2.8% by the end of 2024, before finally reaching the Bank of England’ 2% target rate in 2025.
  • Living standards aren’t expected to return to pre-pandemic levels until 2027-28.


Business and Infrastructure

  • The “full expensing” tax break that allows companies to deduct spending on new machinery and equipment from profits has now been made permanent.
  • The 75% business rates discount for retail, hospitality and leisure films has been extended for a further year.
  • Households that live close to new pylons and transmission infrastructure will receive up to £1,000 a year off their energy bills for a decade.
  • £4.5bn of funding to attract investment to strategic manufacturing sectors such as green energy, aerospace, life sciences and zero-emission vehicles.
  • Over the next two years, £500m will fund AI innovation centres.
  • Financial incentives for investment zones and tax reliefs for freeports have been extended from five to ten years.
  • A further £80m will help fund regeneration projects in Scotland for new Levelling Up Partnerships.

Government Spending

  • Confirmed that the government will provide £14.1bn for the NHS and adult social care, and an additional £2bn for schools in 2023-24 and 2024-25.
  • The Office for Budget Responsibility says higher inflation means the real value of departmental budgets will be £19bn lower by 2027/28.
  • Defence spending will remain at 2% of national income.
  • Overseas aid spending will be kept at 0.5% of the national income.

Other Measures

  • All alcohol duty will be frozen until August 2024. 
  • Duty rate on tobacco products will increase by 2% above RPI inflation, with hand-rolling tobacco rising 12% above RPI.

To stay up-to-date with all the latest changes to tax laws and ensure your business is fully compliant, reach out to our team at Ryans today.

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