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Autumn Statement 2023

The tax measures announced in the autumn statement had been previously announced except for the reduction of the main rate of National insurance.

We have summarised below key announcements made.

Business

  • Expensing allowance made permanent. This was initially set to expire by April 2026.

It relates to qualifying expenditure of plant and machinery (business assets). 100% first year allowances for main rate expenditure and 50% allowances for special rate expenditure.

The relief is available to incorporated businesses on the purchase of qualifying plant and machinery (business assets).

  • Enhanced support for Research and Development intensive small and medium sized businesses.
  • The special tax site reliefs for Freeports and investment zones will be available for a further five years until 30 September 2031.  

Personal

  • A 2% reduction of the main rate of National insurance effective 06.01.2024.

Reduced from 12% to 10% on income between 12,570 and £50,268.

Reduction of class 4 national insurance for self-employed individuals from 9% to 8%.

Abolition of class 2 national insurance for the self-employed individuals.

  • Removal of the self-assessment filing threshold of £150,000 for individuals who earn all their income via pay as you earn.
  • Cash based accounting for self-employed individuals and individuals in a partnership as default with an option for businesses to opt out.
  • ISA system to be simplified. By widening the scope of investments, allowing multiple subscriptions to ISAs in the same tax year and making ISA reporting systems digital effective 06 April 2024
  • Venture capital schemes: the enterprise investment scheme and venture capital trusts will be extended by another ten years, to April 2035.

Other

• National Minimum Wage: the full National Living Wage rate will increase to £11.44/hour (up from £10.42) from April 2024 and will be extended to those aged 21 and over. The 18–20 rate will increase to £8.60/hour, and the apprentice rate to £6.40/hour. 

• Pensions: the full new state pension will increase by 8.5% in April 2024 (maintaining the triple lock guarantee). Digitalisation of relief at source will be delayed ‘until April 2027 at the earliest’. 

• Benefits (including Universal Credit): will increase by 6.7% from April 2024 (based on Sept 2023 inflation).

Administration

  • Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) design changes

Planned improvements to the design of the system.

Draft regulations will be published for technical consultation later in 2023.

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