The Autumn Statement 2023
Rishi Sunak and Jeremy Hunt when they took their positions in 2023, pledged to half inflation. They say that they have achieved this with inflation being recorded at >11% this time last year, to 4.6% in October 2023. Fortunately for them the Liz Truss government made such a mess, they could hardly do any worse, it is worth noting that the inflation target is still 2%, therefore we still run at double their own target.
The chancellor had many positive things to say about the UK economy under a Tory government. The giveaways have been aimed at all at individuals of voting age, those in employment and pensioners, as we’d have expected, the marketing department for the forthcoming general election is in full swing!
National Insurance Contributions
The big headline for today was a reduction of the rate of National Insurance Contributions (NICs). There is a potential saving of up to £754 for employees earning £50,271 or more as a result of the reduction of 2% on the rate of NICs paid on earnings between £12,571 and £50,271. The change will take affect from 6 January 2024, the rate reducing from 12% to 10%.
Self-Employed individuals have not been left out, they will benefit from an abolition of Class 2 NIC, this will save a self-employed individual £179 per annum, this is coupled with a reduction on the rate of Class 4 NIC that self-employed individuals pay based on the amount they earn. Class 4 NIC applies to earnings between £12,570 and £50,270 and will reduce from 9% down to 8%, saving an individual up to £377 per annum.
State Pension and Benefits
Pensioners have received what they have been longing to hear, the Chancellor has confirmed the pension triple lock will be honoured in full. State pensions will go up by 8.5% from April 2024 resulting in a full state pension being worth £221 per week.
The chancellor also announced an increase to State Benefits of 6.7% in line with the inflation rate for September 2023. However, those in receipt of unemployment benefits will need to undertake a mandatory work placement if still looking for a job after 18 months or find that their benefits are stopped.
All alcohol duty is frozen till August 2024.
The government has finally given businesses some stability by announcing an existing measure being made permanent, Businesses can now permanently claim 100% capital allowances on all expenditure on qualifying plant. The relief has long hampered business from making longer term plans on investment as the incentive has changed in structure as many times as the Chancellor has changed underpants.
Really, business has been woefully left out of this Autumn Statement as businesses do not have any right to vote, those owning and running businesses in the UK are in too small a pond for any of the political parties to take an interest right now, they want to catch a much larger number of voters.
The National Living Wage will increase by 9.8% to £11.44 for eligible employees.
The minimum wage increases for young people
Planning Law Changes
The Chancellor announced increases to the fees charged for planning applications but made the case for change by offering a full refund if the application had not been processed within the set timeframe.
All in all, the average voter appears to be slightly better off as a result of the measures announced today but let’s not forget the fact that personal allowances and tax bands have been frozen for some time now.
It is encouraging that after the last Autumn Statement from Jeremy Hunt’s predecessor, (sorry I can’t remember his name as he only held his post for 5 weeks), the Chancellor has confirmed that inflation has significantly reduced and is forecast to reduce further. Not quickly enough for those suffering increased lending costs but its travel in the right direction.
There will most certainly be various cards that the Chancellor has up his sleeve, with an election next year, he needs those to buy votes, will he pull out a Royal Flush? We’ll have to wait and see.
Everyone appears to be betting on a Labour government next year, whether we like the Tories or not, there appears to be some adults at the table now, does the country wish to risk another Truss style debacle when the Tories finally appear to have got control of the economy again??????
If you would like to discuss the changes and how they will affect you and your business, please contact us.