The Chancellor's UK Autumn Statement delivered 22 November 2023
A Chancellor's Statement is technically an economic update, whereas a Budget includes major tax and spending decisions. In reality the lines between the two have become blurred. Read on for the key announcements affecting small businesses and their owners.
Personal tax rates and allowances
Rates of income tax remain unchanged at 20% for Basic Rate Taxpayers and 40% Higher Rate.
The tax free Personal Allowance remains unchanged at £12,570 as do the Basic and Higher Rate thresholds (HR threshold is £50,270).
National Insurance (NI) in employment
The threshold over which employees pay NI (Primary Threshold) remains at £12,570 (inline with the tax free Personal Allowance), but the rate at which employees pay NI (class 1 rate) will fall from 12% to 10% from 6 January 2024.
Meaning that an employee's marginal tax rate falls from 32% to 30% (Income Tax 20% + NI 10%).
National Insurance (NI) in self-employment
Class 2 contributions of £179.40 (£3.45 x 52 weeks) will be abolished from April 2024 (currently paid by the self-employed earning over £12,570).
Class 4 NI will be reduced from 9% to 8% from April 2024 (on earnings between £12,570 - £50,270).
Meaning that the self-employed marginal tax rate falls from 29% to 28% (Income Tax 20% + NI 8%).
Other
Capital Gains Tax Annual Exemption will fall again from £6,000 per person to £3,000 from April 2024.
National Minimum Wage to increase by 9.8% to £11.44 per hour from £10.42 (for those aged over 21), see: National Minimum Wage rates from April 2024
Making Tax Digital (MTD): The self-employed with a turnover over £50,000 to be compliant with MTD from April 2026 (if turnover > £30,000 from April 2027). For more on what this means practically see: How MTD for Income Tax will affect small businesses
For small limited companies, spending less than £1m per year on new plant and machinery the new "Full expensing deduction" differs very little from the existing Annual Investment Allowance.
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