22 November 2023

The countdown (to the general election next year) has clearly started with a range of tax cuts being announced in today’s Autumn Statement.

Whilst cuts to inheritance tax (or even its abolition) had been much debated in the last few weeks, it didn’t even get a mention today and instead it was class 2 NIC (which is paid by the self-employed) that was abolished. It will be interesting to see if the Chancellor has kicked his much-rumoured changes to inheritance tax into the long grass or is keeping them under wraps as a potential vote winner in next year’s Spring Budget.

NIC was a clear target for the Chancellor today, with a 2% reduction in the main rate of employee NIC which will enhance a worker’s net pay by up to £754 per year. There was further good news as the change will be introduced on 6 January 2024 (rather than the traditional 6 April 2024) – presumably so that voters will feel the benefit for a few extra months before next year’s election!

The main rate of NIC for the self-employed was also reduced, but only by 1% (from 9% to 8%) which was probably to take account of the self-employed also benefitting from the abolition of class 2 NIC.

There were several welcome announcements for businesses, the main one being the permanent extension of the “full expensing” capital allowances regime for companies (which was due to expire in March 2026). This announcement was the largest tax cut, costing the Government £11 billion per year (which is much more than the £7 billion that the abolition of inheritance tax would cost). The extension of the 75% business rates discount for the Retail, Hospitality & Leisure sector should help these businesses who are facing a challenging 2024.

Whilst today’s tax cuts are very welcome, the continued freezing of the tax thresholds (which is estimated to raise in the region of £50 billion per year of additional tax through “fiscal drag”) makes it feel as though the Chancellor is giving with the one hand and taking away with the other. Perhaps today is just an appetizer and the main course of tax cuts will be served in next year’s Spring Budget, which is only 4 months away so we don’t have long to wait!

The Autumn Statement 2023 announcement covers the following topics:

  • Income Tax & NIC
  • Capital Allowances
  • Research & Development
  • Construction Industry Scheme (CIS)
  • Business Rates
  • Universal Credit
  • Pensions
  • VAT
  • Duties

Please click here to read and download our Autumn Statement 2023 highlights as a PDF.

If you have any queries on the Autumn Statement 2023 please do not hesitate to contact one of our tax specialists on 01228 530913 or 01768 864466.