What does the Autumn Statement 2023 mean for small businesses?

On 22nd November 2023, Jeremy Hunt delivered the ‘Autumn Statement for Growth’. What will this mean for you and your business?

We highlight the key points below:

Personal Tax

Income tax – The government has stated that the basic rate will remain at 20%, the higher rate at 40% and the additional rate at 45% for 2024/25.
The income tax personal allowance and basic rate limit are fixed at their current levels until April 2028.
As corporation tax due on directors’ overdrawn loan accounts is paid at the dividend upper rate, this will also remain at 33.75%
The inheritance tax nil-rate bands will stay fixed at their current levels until April 2028.
The capital gains tax annual exempt amount will be reduced from £6,000 to £3,000 from April 2024
The government will reduce the Dividend Allowance from £1,000 to £500 from 6 April 2024.
The threshold for the 45% Additional Rate of income tax had reduced from £150,000 to £125,140, this will continue for 2024/25
A number of changes were made to the tax regime for pensions for 2023/24 – these are outlined in more detail in the main statement

Employment

The Chancellor announce major changes to the National Insurance Contributions (NICs) system.

The government will cut the main rate of Class 1 employee NICs from 12% to 10% from 6 January 2024 and the main rate of Class 4 self-employed NICs from 9% to 8% from 6 April 2024.
The government will abolish Class 2 self-employed NICs from 6 April 2024.
The National Living Wage (NLW) and National Minimum Wage (NMW) will be increased to £11.44 from 1st April 2024, in addition, from April 2024 the NLW will be extended to 21 and 22 year olds.

Business

To increase business investment, the government has announced a number of measures.

Full Expensing will be made permanent.
Business rates – The small business multiplier will be frozen for another year, while the 75% Retail, Hospitality and Leisure relief will be extended for 2024/25. The standard multiplier will be uprated in line with September’s Consumer Prices Index. These changes will take effect from 1 April 2024 in England.
The Annual Investment Allowance, which gives a 100% write-off on certain types of plant and machinery, remains at £1 million per 12-month period.
The government has confirmed that the rates of corporation tax will remain unchanged.
The VAT registration and deregistration thresholds will not change for a further period of two years from 1 April 2024, staying at £85,000 and £83,000 respectively.
The removal of barriers to critical infrastructure by reforming the UK’s inefficient planning system and speeding up electricity grid connection times.
A package of pension reform and driving private investment from insurers into infrastructure by legislating for key reforms to Solvency II.
Making £4.5 billion available in strategic manufacturing sectors such as auto, aerospace, life sciences and clean energy from 2025 for five years.
New Investment Zones.
From April 2024, firms bidding for government contracts over £5 million will have to demonstrate that they pay their own invoices within an average of 55 days, tightening to 45 days in April 2025 and then 30 days in future years.
Changes to Research and Development.

Read the full Autumn Statement here.