The Autumn Statement delivered by Chancellor Jeremy Hunt on November 22, 2023, included several key headlines and measures:
1. National Insurance Contribution (NIC) Cuts:
The main rate of Class 1 NICs for employees earning more than £12,570 a year will be reduced from 12% to 10% starting from January 6, 2024.
The Class 1 NIC rate will remain at 2% for earnings above £50,270 a year.
Self-employed individuals will experience a cut in the main rate of Class 4 NICs from 9% to 8% from April 6, 2024.
2. National Minimum Wage (NMW):
The National Living Wage (age 21 and over) will see a substantial increase to £11.44 from April 1, 2024.
3. Tax Relief for Businesses:
The Annual Investment Allowance (AIA) is permanently set at £1 million.
'Full expensing,' providing 100% upfront tax relief on qualifying plant and machinery, will be made permanently available for companies.
4. Making Tax Digital (MTD) for Income Tax:
MTD for income tax will be phased in from April 2026, starting with sole traders and property landlords with gross income over £50,000.
5. Business Rates:
A new business rates support package worth £4.3 billion over the next five years to support small businesses and the high street.
6. Capital Gains Tax:
The capital gains tax annual exemption is set to drop to £3,000 in 2024/25, down from £6,000 in 2023/24.
7. Corporate Taxes:
The Corporation Tax rate will be 25% for profits exceeding £250,000 a year, and the small profits rate of 19% for profits up to £50,000.
8. Research & Development (R&D) Reliefs:
A new R&D scheme for limited companies will be implemented from April 1, 2024.
These measures are part of the government's strategy to strengthen the economy, reduce debt, cut taxes, and reward hard work.
As we move into 2024, there are a lot of tax changes scheduled, plus we can expect more with a Spring Budget and a general election on the horizon.
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