Autumn Statement 2023

On Wednesday 22nd November 2023, Chancellor Jeremy Hunt unveiled the government's latest tax and spending plans in the House of Commons.

Here are the updates relevant to limited companies, sole traders, partnerships and individuals;

• Corporation Tax - “full expensing” has been made permenant. This means that limited companies can deduct 100% of capital expenditure against profits for corporation tax in year one.

• Class 1 National Insurance has been reduced from 12% to 10% from 6th January 2024. This is paid by PAYE employees and directors.

• Class 2 National Insurance has been abolished from the 24/25 tax year for earnings above £12,570. This is a flat rate of £3.45 per week (£179.40 per year) paid by self-employed sole traders.

• Self-employed sole traders earning between £6,725 and £12,570 can continue to make National Insurance contributions through an NI credit. Those with profits below £6,725 will be able to continue to pay Class 2 National Insurance voluntarily.

• Class 4 National Insurance has been reduced from 9% to 8% from the 24/25 tax year. This is paid by self-employed sole traders earning over £12,570 per year.

• Individuals whos only income is from PAYE employment will no longer be required to file a self-assessment personal tax return from 24/25, currently those earning in excess of £100,000 per year are required to do so.

• The National Living Wage will rise from £10.42 to £11.44 per hour from April 2024. This applies to PAYE employees aged over 21.

• The 75% discount on business rates up to £110,000 for retail, hospitality and leisure businesses has been extended.

• The government will consult on giving pension savers a "legal right to require a new employer to pay pension contributions into their existing pension".

It is noteable that no changes have been made to the personal allowance, higher and additional rate tax thresholds which remain at £12,570, £50,270 and £125,140 respectively.

The VAT registration threshold also remains unchanged at £85,000.

The next statement will be the spring budget expected in April 2024.