Here are some of the main announcements from Chancellor Jeremy Hunt’s autumn statement.
The headline rates of national insurance are being cut by 2%, impacting about 27 million workers.
Those earning more than £12,570 a year currently pay 12% national insurance on pay up to £50,270. From 6 January 2024 will pay 10% national insurance.
Meanwhile for the self-employed, Class 4 national insurance will be cut from 9% to 8% on earnings between £12,570 and £50,270.
Class 2 national insurance will be abolished – saving £192 a year – for the self-employed.
Wages and Benefits
The minimum wage – which the government sometimes refers to as the national living wage – will increase by £1.02 from £10.42 to £11.44 per hour from April.
This rate will now apply to Britons over 21, bringing the eligible age down from 23. For anyone under 21, the minimum wage is lower – but this is also increasing, as is the lowest legal pay for apprentices.
Those aged 18 to 20 will get at least £8.60 an hour from April, which is an increase of £1.11. For those 16 and 17, and apprentices, the minimum pay will be £6.40 – a rise of £1.12 on last year.
Benefits will increase by 6.7%, the September rate of inflation, as is customary, with the increase coming into effect in April.
The chancellor announced he will increase the local housing allowance rate to the 30th percentile of local market rents, which he says will give 1.6 million households an average of £800 support next year.
Mr Hunt reaffirmed government plans to remove benefits and step up monitoring of welfare recipients in an effort to bring more people into work.
Jobseekers will have benefits such as free medicines and legal aid removed if they’re found not to be looking for work under the Back to Work Plan which aims to bring 1.1 million people back into work.
State pension payments are to rise by 8.5% to £221.20 a week, worth almost an extra £900 a year. The triple lock will be “honoured in full”.
Work to establish a pension pot for life scheme will be begun, giving workers the option to nominate the fund their employer pays into, which can follow them as they move throughout their working life.
The full expensing scheme – currently due to expire in 2026 – will be made permanent.
This allows firms to write off the entire cost of spending on new machinery and equipment, including IT equipment, while also saving 25p from every pound spent on other types of investment.
Moreover, a “new, simplified” tax relief for research and development will combine the existing R&D Expenditure Credit and SME schemes.
Through that merged scheme, Mr Hunt said he will also cut the rate at which loss-making companies are taxed from 25% to 19%.
The 75% discount on business rates – the tax paid on non-domestic properties – up to £110,000 for firms in retail, hospitality and leisure will be extended for another year.
Mr Hunt claims this will save the average independent pub more than £12,800 next year.
All alcohol duty will be frozen until August. That means no increase in duty on beer, cider, wine or spirits.
From today tobacco duty for hand-rolling products will increase by RPI plus 12%, while other tobacco products will increase by RPI plus 2%.
From April 2024 savers will be able to pay into more than one of each type of Isa however the Isa allowance will remain at £20,000 a year.
In an attempt to cut the time it takes for planning applications to be granted for businesses, the chancellor said he will allow local authorities to recover the full costs of major business planning applications if they meet guaranteed faster timelines.
But if they fail, the business will be refunded in full and have their planning application processed free of charge in what the chancellor described as a “prompt service or your money back”.
People living closest to new pylons and electricity substations will receive up to £10,000 off their bills over 10 years.
The chancellor also said he will also extend national insurance relief for employers of eligible veterans for another year. This will provide £10m to support the Veterans’ Places, Pathways and People programme, he added.