It’s that time of year again, the leaves have fallen from the trees, you’re counting down the days to the first window of your advent calendar, and it’s time for the Autumn Statement.
Rumors were that the big announcements would center around:
A national insurance cut
An increase to the minimum wage, and
Extending full capital expensing for companies investing in capital items.
The Chancellor of The Exchequer, Jeremy Hunt delivered the Autumn Statement against a background of rising inflation and cost of living pressure and we were keen to see whether there were any surprises.
In this article, we’ll set out some of our key takeaways from The Autumn Statement, keeping in mind the conversations we have with the small business community.
Full expensing
Companies investing in IT, machinery and equipment will continue to benefit from full expensing. For every £1 spent on these items, a company can reclaim 25% in corporation tax and this scheme was set to end in 2026. It has been announced that the scheme will continue permanently.
Business rate relief
The 75% discount on business rates up to £110,000 for retail, hospitality and leisure businesses will continue for a further year.
National insurance cuts
Starting in April 2024, Class 2 National Insurance contributions will be abolished for self-employed people earning more than £12,570. These are the contributions the self-employed pay at £3.45 per week currently.
Class 4 National Insurance contributions at 9% for self-employed people earning £12,570-50,270 will be cut to 8% from April as well.
In addition, from 6th January, the National Insurance rate for employees will be cut from 12% to 10%. The government are planning emergency legislation this week to push this through.
National living wage
The minimum wage will rise from £10.42 to £11.44 in April 2024. Previously this higher hourly rate has only been for employees aged over 23, but will be extended from April to 21 and 22 year olds.
18-20-year-olds will be paid a minimum of £8.60, and 16-17 will be paid a minimum of £6.40 per hour from April.
And how about the economy? As a small business owner, the macroeconomic picture will impact your forecasts for the future, so here are a few of the headlines.
The Chancellor reported that The Office for Budget Responsibility (OBR) shows the economy will grow by 0.6% this year and 0.7% next year.
Inflation is expected to fall to 2.8% by the end of 2024.
The OBR expects the Bank of England Base Rate to stay at around 4% until the end of 2028.
We would love to discuss how the Autumn Statement impacts your business and your plans for the future. Feel free to pick up the phone or drop us an email. You can contact us at hayley@jpbandco.co.uk
