Chancellor’s Autumn Statement “for growth” - Permanent business tax break, slashed employee NI contributions, and more22/11/2023
The Chancellor of the Exchequer, Jeremy Hunt, has delivered his Autumn Statement. He has confirmed an increase in minimum wage, slashed employee National Insurance, made the ‘full expensing’ tax cut for business permanent, introduced business rates discounts for the hospitality, retail, and leisure industries, and more. Read below for a roundup of all the relevant news:
Chancellor confirms National Living Wage rise
In a widely expected move, Mr. Hunt has announced that the National Living Wage, or minimum wage, as it is more commonly known, will increase from £10.42 to £11.44 per hour in April 2024.
This is a 9.8% increase and could be worth up to £1,800 for a full-time worker. Mr. Hunt calls this decision “the largest ever cash increase” in the National Living Wage.
For the first time in British history, this salary will be paid to people aged 21 and 22. At the moment, only workers above the age of 23 receive the National Living Wage’s highest band of £10.42 per hour.
Starting in January 2024, the National Insurance rate will be reduced from 12% to 10%
According to Mr. Hunt, the main employee National Insurance rate will be reduced by 2%, from 12% to 10%, beginning on 6 January 2024.
He claims that the change will benefit 27 million people and that someone earning £35,000 will save more than £450 per year.
Business rate relief has been extended
The chancellor also addressed business rates, noting that the government has already taken a third of the properties through small company rate relief.
According to Hunt, the government will continue to freeze the small business multiplier for another year.
He also says he will prolong the 75% business rate discount of up to £110,000 for retail, hospitality, and leisure enterprises for another year.
According to Hunt, the average small business will save more than £20,000 and the average independent pub will save more than £12,800 next year.
Corporate tax break has been made permanent
The Chancellor has made the widely anticipated decision to make “full expensing” for businesses permanent.
For every £1 invested in IT, machinery, and equipment, a company can claim back 25p in corporation tax. Companies can do this all at once rather than having to balance the cost against corporation tax over a longer period of time.
It is a significant benefit for profitable businesses that invest considerably in equipment, such as manufacturers, and Mr. Hunt says it will cost £11 billion per year.
He described it as the “largest business tax cut in modern British history.”
Investment of £5 billion in British industry
The Chancellor announced that the government will invest £500 million over the next two years in “innovation centres” designed to turn the UK into an “AI powerhouse.” This is due to “the success of the supercomputing centres in Edinburgh and Bristol,” he said.
He also announced a major investment into “strategic manufacturing” and promised an additional £4.5 billion in funding between 2025 and 2030. This includes £975 million for aerospace firms, £520 million for life science firms, and £960 million for new green industry firms.
“Taken together across our fastest-growing innovation sectors, this support for manufacturing alone will attract an estimated £2bn of additional investment a year over the next decade,” he said.
If you would like help ensuring that your business is making the most of the new opportunities outlined in the Chancellor’s Autumn statement, or you would like to make sure you are compliant with new wage and NI regulations, contact JW Hinks on 0121 456 0190. Our experienced and professional team of experts can help you leave no stone unturned when it comes to future proofing your business.