While no-one could confuse Chancellor Jeremy Hunt with Santa Claus, his autumn budget ‘sack’ did contain a few sweeteners for individuals and businesses working hard to make headway in today’s tough economic climate.
National Living Wage
Whether you’re an elf in Santa’s workshop, or employed anywhere in the UK, the National Living Wage (NLW) is going up from £10.42 to £11.44 per hour in April 2024 – the largest increase since the rate was introduced in 2016. In addition, the age threshold for payment of the NLW will be lowered from 23 to 21, benefiting younger workers.
Benefits and pensions changes
People on benefits and pensioners are often in our thoughts in the chill of mid-winter and as we approach Christmas, when household income is under extra pressure: the autumn statement news was that Universal Credit and welfare benefits are set to increase by 6.7% from April 2024, but this must be viewed alongside controversial rule changes for benefits claimants. Many pensioners were relieved to hear that the Government was sticking to its commitment to the ‘triple lock’ pension, ensuring an 8.5% state pension increase next April.
National Insurance cuts
Around 27 million people stand to benefit from a 2% cut to Class 1 National Insurance, but they’ll have to wait until the New Year, as the measure will only be effective from paydays on or after 6 January 2024. It will provide workers with a maximum saving of £754.
Boost for investment
The Government’s biggest boost for business unwrapped during the autumn statement was to make permanent the Full Expensing Scheme. In essence, this enables companies to offset investment costs in the current tax year, rather than on a percentage basis over several years.
This measure is expected to unlock an additional £14 billion for British companies to invest in sustainable economic growth.
Business rates support package
A further measure aimed at saving businesses and stimulating economic activity was a £4.3bn support package including freezing small business rates and offering extended relief for retail, hospitality and leisure enterprises.
Investments in R&D and innovation
At Afford Bond, one of our specialist areas is R&D and the various tax relief schemes associated with innovation. We were pleased that the Government continues to focus on this area to maintain the UK’s leading role in science and tech, including expanding eligibility criteria. If you think your business could benefit from these changes, please get in touch. We can also advise on targeted investments in advanced manufacturing, digital tech, life sciences and creative industries.
As we all think about New Year’s resolutions, and the challenges and opportunities that 2024 will bring, it’s a chance to consider the bigger picture, and you don’t get much bigger than climate change and the imperative to protect our environment…
Some of the final provisions of the Autumn Statement were to extend the Climate Change Agreement Scheme for two years, allocating funds for energy-efficient technologies and providing tax relief to businesses which support the Government’s net-zero goals.
For more information on this, or any other areas of business or personal taxation affected by the Autumn statement, please do not hesitate to contact us and our experts will be pleased to talk you through the key points.