News

Autumn Statement 22.11.2023 Summary

27 - 11 - 2023

On 22 November 2023 the Chancellor of the Exchequer, Jeremy Hunt, presented his Autumn Statement to the Houses of Parliament. The Statement is an opportunity for the Government to announce any proposed tax changes and give an updated economic forecast.

A summary of the main tax announcements is noted below. Please do not hesitate to contact Foremans LLP if you have any questions regarding items not addressed:

1.  Personal Taxation

 

Ø  Income Tax Rates and Thresholds

 

·         No proposed changes to income tax rates and thresholds.

		2023/2024	2024/2025
Personal Allowance		£12,570	£12,570
Tax Thresholds		Tax Percentages
Basi tax rate	£12,570 to £50,270	20%	20%
Higher tax rate	£50,271 to £125,140	40%	40%
Additional tax rate	Above £125,140	45%	45%

 

Ø  National Minimum and Living Wage

01 April 2024 National Minimum and Living Wage will increase to £11.44 an hour for workers aged 21 plus.

Ø  National Insurance Contribution Rates

 

Ø  Employees:

– Class 1 Employee NIC will reduce from 12% to 10% on 06 January 2024.

-  No change to the thresholds.

 

Ø  Self Employed:

–  Class 4 NIC will reduce from 9% to 8% from 06 April 2024.

-  Class 2 NIC will be abolished from 06 April 2024.

 

Ø  Individuals taxed only through Pay As You Earn (PAYE) will not be required to file a Self Assessment Tax Return from 2024/2025 Tax Year.

 

Ø  Making Tax Digital (MTD) will be implemented for Self Employed and Landlords with annual income over:

 

o   £50,000 from April 2026.

o   £30,000 from April 2027.

 

Ø  The income tax basis for the Self Employed and Partnerships will be simplified from 06 April 2024. Detail to be released.

 

2.  Business Tax

 

Ø  No changes to Corporation Tax

 

Ø  The capital allowances full expensing regime has been made permanent. Main Rate assets can claim a 100% first year allowance and special rate assets a 50% first year allowance.

 

Ø  Investment zones in England are extended from a 5 year life to a 10 year life. 3 new zones announced in England - Greater Manchester, West Midlands and East Midlands. One new investment zone in Wales – Wrexham.

 

Ø  Business Rates – 75% business rates relief for Retail, hospitality and Leisure industry extended for one more year.

 

Ø  IR35 Offset Facility

As of 06 April 2024 where a failure to deduct PAYE and NI is assessed HMRC will be able to set off the deemed employer PAYE liability against taxes paid by a worker and their intermediary.

Ø  Construction Industry Scheme (CIS)

-          VAT tests will be added to the Gross Payment Status Process.

-          Removal of majority of landlord to tenant payments from the scope of CIS.

-          The first review of a gross payment status holder’s compliance history will be brought forward to 6 months after application for gross status. The review will revert to 12 months after.

 

3.  Other Taxes

 

Ø  Alcohol – Alcohol duties frozen until 01 August 2024.

 

Ø  Tobacco

–  Increase in duty on all tobacco products by RPI + 2%.

–  Increase in duty on hand rolling tobacco by RPI + 12%.

 

Ø  HGV Levy and Vehicle Excise Duty – will be frozen at 2023/2024 rates for 2024/2025.

 

Ø  Vehicle Excise Duty for cars, vans and motorcycles – increase by RPI from 01 April 2024.

 

4.  Other Measures

 

Ø  Benefits

- Universal credit and other working age benefits in England and Wales will be increased by 6.7% from 06 April 2024.

 

- people claiming benefits will need to do mandatory work experience if they do not find employment within 18 months.

- Work Capability Assessment to be reformed to reflect availability of home working.

Ø  State Pension – will be increased by 8.5% from 06 April 2024.

 

Ø  A retail share offer for the sale of some of the UK Government’s stake in Natwest Bank.

 

5.  Tax Compliance

 

Ø  HMRC’s debt management resource is to be increased to support individuals and businesses who are unable to pay their tax.

 

The above is meant as an indication of the main points included in the Autumn Statement 2023. The information should not be relied upon as taxation advice.

Please contact us at Foremans LLP on 01244 625 500 for a free no obligation discussion on any of the changes above.