The Autumn Statement had been initially trailed as focusing on the longer term issues facing the country, but Mr Hunt decided to prioritise short-term tax cuts over maintaining future expenditure. The most headline-grabbing immediate moves were cuts to national insurance and placing the expensing of corporate investment on a permanent basis.
Some of the rumoured changes, such as inheritance tax reform, did not appear, but there is still a chance – the Spring Budget is due to take place in March next year.
Some of the key announcements included:
- A cut in the main rate of class 1 employee NICs from 12% to 10% taking effect from as soon as 6 January 2024. There will be a reduction in the main rate of class 4 self-employed NICs from 9% to 8% from 6 April 2024, when class 2 NICs will be abolished.
- Making permanent the full expensing of investments by companies in qualifying plant and machinery so it will continue after April 2026.
- The continued freeze of the main income tax allowances and thresholds, the main national insurance contributions thresholds and the inheritance tax nil rate bands for 2024/25.
- A full triple lock increase of 8.5% for 2024/25 for state pensions and pension credit. But universal credit and most other benefits will increase by just 6.7% in line with CPI inflation to September 2023.
- Freedom for investors to make multiple subscriptions to ISAs of the same type each year from April 2024. Partial transfers of ISAs between providers will also be permitted.
- A 9.8% increase in the national living wage to £11.44 an hour.
With a full Budget still likely in the Spring, there is much in this Autumn Statement on which to build your tax and financial planning for the rest of the current tax year and beyond.
If you have any questions about how the Autumn Statement affects you, please get in touch.
