There were actually a few announcements in this Autumn statement that I’m rather pleased about:
The big headline is obviously the reduction in National Insurance rates for employed and self-employed individuals. I’m glad this reduction has gone to National Insurance rather than income tax as this will benefit workers rather than investors.
I’m especially pleased about the abolition of Class 2 National Insurance. It’s hard to believe just how bad HMRC are at administering Class 2 NIC and how much of my time is spent sorting out their errors relating to a relatively small charge.
I’m glad to see an announcement tucked away in the small print that HMRC are looking again at their position relating to the deductibility of training costs for the self-employed. Some readers will know that this has been a particular bugbear of mine so it is good to see that the issue is being considered again. Hopefully there will be change this time!
Finally, I’m thrilled that the rumoured cuts to inheritance tax have not materialised and that the chancellor did not choose to use his ‘tax-cuts headroom’ to reduce a tax charge that affects only 4% of estates. Instead, the National Insurance reduction will benefit an estimated 29 million working people.
Individuals
- Employee National Insurance payable on earnings between £12,570 and £50,270 reduces from 12% to 10% from 6 January 2024
- Minimum wage to increase from £10.42 per hour to £11,44 from April 2024; this will apply to individuals agreed 21 and over
- Pensions ‘triple-lock’ maintained with an increase of 8.5% from April 2024
- Personal allowance remains frozen at £12,570 until April 2028
- Higher rate threshold remains frozen at £50,270 until April 2028
- No changes to Inheritance Tax thresholds or rates
- Capital gains tax annual allowance to fall from £6,000 to £3,000 from April 2024
- No changes announced to capital gains tax rates
- No changes to savings starting rate allowance (£5,000) or personal savings allowance (£500 or £1,000 for lower and higher rate taxpayers).
Businesses & self-employed
- Class 4 National insurance payable on self-employment earnings between £12,570 and £50,270 reduces from 9% to 8% from April 2024
- Class 2 National Insurance to be abolished
- Employment allowance to remain at £5,000
- The VAT registration threshold remains fixed at £85,000
- HMRC to re-visit the deductibility of training costs for the self-employed
- Business rates relief for eligible retail, hospitality and leisure to be remains at 75% for another year
Companies & shareholders
- The tax-free dividend threshold to fall from £1,000 to £500 from April 2024
- No changes to Corporation tax rates and thresholds
- Full expensing made permanent
- No increase to benefit in kind charges for company cars and vans for 2024/25
- Further changes to R&D relief.
Property
- No changes to Stamp Duty rates and thresholds
- ATED charges will increase by 6.7% from April 2024.
- Reforms to planning system
Other announcements
- Minimum wage to increase to £11.44 per hour from April 2024 for those aged 21 and over
- Alcohol Duty frozen until August 2024
- Duty on tobacco products to increase by 2% over RPI; duty on hand-rolling tobacco to increase by 12% over RPI
- Pensions triple lock to remain in place with state pension to increase by 8.5% from April 2024
- Universal credit and other benefits to increase by 6.7% from April 2024
- Resources to be made available for HMRC “to ensure everyone pays tax they owe” expected to raise £5bn across the forecast period.
- Back to Work Plan introduced for long-term sick, disabled and unemployed individuals.
