The Chancellor of the Exchequer, Jeremy Hunt, delivered his Autumn Statement for 2023 on 22nd November. There was positive news: inflation is now at 4.6% and is due to reduce to 2% by the close of 2025. And, as usual, measures were announced to boost the economy – it’s anticipated to grow by 0.6%.
In this blog, we’ll take you through the relevant announcements, along with how they’re expected to affect your self-employment business.
Business rates
Hunt revealed that business rates will continue to be frozen for another year, leading to a £4.3 billion tax break. What’s more, the 75% business rate discount for the retail, hospitality, and leisure sectors will also be extended for an additional 12 months. This will save the average independent pub more than £12,800 in 2024.
Pubs had more good news in that the Brexit Pubs Guarantee means that duty on pints is lower than in supermarkets, and alcohol duty will be frozen until August next year. Fuel duty remains the same too.
National Insurance Contributions
Class 2 National Insurance Contributions (NICs), which are paid by the self-employed who earn more than £12,570, will be abolished. This will allow those who work for themselves to keep an average of £192 more in their pocket per year. It should simplify and cut tax for almost two million people.
As for Class 4 NICs, which are paid on profits between £12,570 and £50,270, these will see a reduction from 9% to 8% from April 2024 – resulting in an average saving of £350 per year. It’s worth noting that employee NICs will experience a cut from 12% to 10% as well.
National Living Wage
But it’s not all savings for businesses. The National Living Wage (NLW) will increase, rising from £10.42 to £11.44 for those aged at least 21. This is a 9.8% boost – the largest ever increase in the NLW ever – and is worth up to £1,800 for a full-time employee. What’s more, this is the first time it applies to those aged 21 and above; previously, the higher-end amount was only accessible to those 23 and over.
In addition, the National Minimum Wage and apprentice rate have also witnessed a rise.
Other announcements
There will be a simplified tax relief scheme for research and development, which joins existing R&D Expenditure Credit and SME schemes. Plus, the threshold for additional support for R&D intensive loss-making SMEs was lowered to 30%.
Hunt said that the government would reduce the rate at which loss-making companies are taxed from 25% to 19%. And there will be tougher regulation on late payments, helping to support small businesses. State pension payments will see a bump of 8.5% also.
Making the numbers one less thing to think about
These announcements are expected to have both a positive and negative effect on the self-employed. So, if you need support figuring out your business’ finances, look no further than Nabarro Poole.
We provide tailored advice, budget and forecasting support, payroll services, and much more. Speak to our friendly team to get started.
Recent Comments