Autumn Statement 2023

Accountants Chester – Autumn Statement

Key Tax Points

In an effort to boost the UK economy, Chancellor Jeremy Hunt unveiled a package of measures that includes business tax cuts and reforms to national insurance contributions:

The headline rate of national insurance for employees will be reduced by 2 percentage points, affecting around 27 million workers. This reduction will take effect on January 6.

For the self-employed, the Chancellor announced reforms to national insurance payments that will save around 2 million people an average of £350 per year. Class 2 national insurance, which currently costs £192 per year for the self-employed, will be abolished. Additionally, Class 4 national insurance will be reduced from 9% to 8% on earnings between £12,570 and £50,270.

In a bid to position the UK as a leader in artificial intelligence, £500 million will be invested over the next two years to fund the creation of additional “innovation centers.” Furthermore, a “new, simplified” tax relief for research and development will be introduced, combining the existing R&D Expenditure Credit and SME schemes.

The full expensing scheme, which was originally set to expire in 2026, will now be permanent. This scheme allows businesses to immediately deduct the full cost of investments in new machinery and equipment, while also providing a 25p tax break for every pound spent on other types of investment.

To support businesses in the retail, hospitality, and leisure sectors, the 75% discount on business rates for properties with a rateable value of up to £110,000 will be extended for another year. According to the Chancellor, this extension will save the average independent pub over £12,800 next year.

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