What are the key messages for UK businesses in the Autumn Statement 2023?

Chancellor Jeremy Hunt recently announced his Autumn Statement, 2023. So, what are the key messages for UK businesses?

At Expend, we’re on the side of business, so let’s take a look at the key measures, designed to stimulate growth, tackle inflation and mitigate the cost of living crisis. 

Jeremy Hunt announced 110 growth initiatives, aimed at cutting through red tape, boosting productivity, and giving business taxes a trim. 

According to the Office for Budget Responsibility, his set of budget strategies should rev up business investment, spike employment, squash inflation, and help grow GDP. 

Here’s a summary of the key messages. 

What are the changes to National Insurance Contributions (NIC)?

There is no change in thresholds, but some employees will get an NIC cut. The main employee NIC rate takes a dip from 12% to 10%, starting January 6, 2024. Employers will continue to pay 13.80% for all employees earning more than £8,840 (except for under 21 and apprentices who are 25 and under.) And the Employment Allowance remains at £5,000 until March 2026. 

What are the Self Employed National Insurance (NI) rate changes?

If you’re self-employed, you're in for some changes in "Class 2" and "Class 4" NI rates from April 2024.

• "Class 2" NI for self-employed people who earn more than £12,570 will be abolished, which takes away a flat rate charge of £.45 per week. 

• "Class 4" NI will be reduced to 8% from 9%, paid on profits between £12,570 and £50,270. The NI rate for profits more than £50,270 will remain at 2.73%. 

What are the changes to Wages?

Good news for employees – the national living wage is moving up by 9.8% from April 2024. The new rates will be: 

Employees aged 21 and over: £11.44 per hour.  

Employees aged 18-20: £8.60 per hour.

Employees aged under 18: £6.40 per hour. 

Apprentices: £6.40 per hour. 

What are the changes to business rates?

Business rates are a property tax for business premises and are calculated using a multiplier. The rateable value of your business premises is multiplied by that number to achieve your business rates bill. The change means that a small business multiplier will be used for rateable values of less than £51,000.  

There is also an extension to the Retail, Hospitality and Leisure business rates relief scheme, with qualifying properties given 75% relief on business rates, up to ceiling of £110,000 for each business. 

It’s estimated that this will save independent shops more than £20,000 on average, and independent pubs more than £12,800.

What are the changes to Corporation Tax?

There are no shake-ups in the main corporation tax rate, which stays at 25% for limited companies on profits more than £250,000. If your business qualifies for the Small Profits Rate, with profits of £50,000 or less, then the rate will be 19%. Profits in the range of £50,000 to £250,000 will be charged at a higher rate of 25%. 

The scheme enabling full capital expensing has graduated from temporary to permanent and means that every pound spent on IT, machinery or plant qualifies for relief from tax from taxable profits.

What are the changes to Investment in Business?

Government cash is flowing into exciting areas – think AI innovation centres (£500 million); green industries (£960 million), and zero emissions tech in the car industry (£4.5 billion). Get ready for some major upgrades.

What are the changes to Income Tax?

The earlier 2022 Autumn Statement announced that there would be no changes in income tax rates until 2027/28. The state pension's getting a boost, and there's talk of making life simpler for savers.

A reminder of the tax bands and rates:

Band Taxable income Tax rate

Personal Allowance Up to £12,570 0%

Basic rate £12,571 to £50,270 20%

Higher rate £50,271 to £125,140 40%

Additional rate over £125,140 45%

What are the changes to Energy prices?

We’ll say goodbye to the Energy Bills Discount Scheme on March 31, 2024. Watch out for potential changes in energy prices. It makes sense to review your energy contracts. 

What are the changes to Dividend Tax and Capital Gains Tax? 

The Dividend Tax threshold is dropping to £500, from the current £1,000 from April 2024. And for the share-savvy, Capital Gains Tax is coming down, with the tax-free threshold getting a trim to £3,000. So, you’ll pay 20% capital gains tax on shares’ profits. 

What are the changes to Research and Development Tax Relief?

R&D tax relief will have a facelift, merging with the Research and Development Expenditure Credit (RDEC) for more simplicity. Innovative projects in science and tech, get ready to cash in.

Hopefully, this has been a useful roundup of the key messages for business in the Autumn Statement 2023. Full details of the Autumn Statement 2023 are available online. 

Disclaimer: This is not legal, accounting, or tax advice - it's simply a guide. If you need help, check with your accountant or contact HMRC directly.