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Autumn Statement 2023

Autumn statement 2023
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Gateway Finance

Chancellor Jeremy Hunt’s Autumn Statement presented a significant shift in fiscal policy, marked by a 2% cut to national insurance and the permanent extension of the full expensing capital allowance scheme. The focus was on tax cuts to stimulate economic growth in the face of an upcoming election. Here is a summary of the changes:

  • Tax Cuts:
    • National insurance cut by 2%, impacting 27 million workers and reducing personal tax payments.
    • Class 2 national insurance abolished for the self-employed.
    • Class 4 national insurance for the self-employed reduced from 9% to 8%.
    • National living wage increased for 23-year-olds and over to £11.44 per hour from April.
  • Business Measures:
    • Full expensing capital allowance scheme made permanent, benefitting large-scale business investments.
    • Reforms to ISAs, described as the biggest in a decade, with changes to fractional shares and long-term asset funds.
    • Extension of Freeports and business rate discounts for retail, hospitality, and leisure.
  • Economic Outlook:
    • Emphasis on boosting economic growth, with a forecasted fall in headline inflation.
    • Debt predicted to be 91.6% of GDP next year, outperforming expectations.
    • Commitment to providing HMRC with resources to ensure tax compliance, potentially raising an additional £5bn.
  • Concerns and Omissions:
    • No changes to inheritance tax or a 1% cut to income tax, as speculated in the media.
    • Criticisms regarding the scope of full expensing, excluding certain assets and potential balancing charges.
    • Questions raised about the impact of minimum wage increases on struggling businesses.
  • Future Expectations:
    • Speculation about potential announcements in the pre-election Spring Budget, including inheritance tax changes.
    • Uncertainty about further updates on stamp duty land tax (SDLT) after its absence in this statement.
business accounting

In summary, Chancellor Hunt’s Autumn Statement is characterized by significant tax cuts aimed at various segments of the population, with a strong focus on stimulating business investment and economic growth. However, concerns and speculations about certain omissions and future announcements linger, adding complexity to the overall impact of these fiscal measures.

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