Source: The QuickBooks Team
On Wednesday 22nd November 2023, Chancellor Jeremy Hunt shared his Autumn Statement with Parliament, and we’ve rounded up some of the key topics that may impact your clients.
The Chancellor claims to have included 110 growth measures in his Autumn Statement that aim to combat red tape, support entrepreneurs, unlock UK investment and cut business taxes.
A call to end late payments for Small Businesses
We launched the late payments pledge pledge to support our customers, and we’re delighted to see the government taking action in this critical area of UK business.
The Government has announced a more stringent payment requirement for government contracts. The procurement act means firms bidding for work from April 2024 will have to demonstrate they pay invoices within an average of 55 days, tightening to 45 days in April 2025 and to 30 days in the coming years.
“Full expensing” to become permanent
Full expensing means that for every £1 your client invests in IT, machinery and equipment, they can claim back 25p in corporation tax.
Business rate relief extended
The government will freeze the small business multiplier for a further year, and there will continue to be a bespoke business rate discount for the hospitality, retail and leisure sectors worth £4.3bn. Businesses that fall into one of these categories will receive a 75% discount on business rates up to £110,000.
£4.5bn investment in Manufacturing
From 2025 onwards, 4.5bn will be invested into manufacturing, this includes £975m for aerospace firms, £520m for life sciences, and £960m for new green industry firms.
Additional Investment Zones announced The Chancellor has announced further investment zones, this arrives shortly after the recent addition of West Yorkshire to the existing zones.
West and East Midlands along with Greater Manchester have been added to the English zones, whilst Wrexham and Flintshire join the Welsh Zones. The investment zone relief has also been extended from 5 to 10 years.
National Living Wage increase
The National Living Wage (NLW) will rise from £10.42 to £11.44 an hour from April 2024, this will be worth an additional £1,800 per year for full time workers. The National Living Wage will also be applicable for 21 and 22 year olds for the first time.
Class 1 National Insurance cut will benefit 27 million workers
The cost of National Insurance is dropping to 10% for employees on the equivalent annual earnings of between £12,750 and £50,268. This means that a worker on a salary of £35,000 can expect to save over £450 a year. This will come into effect from 6 January 2024. QuickBooks Payroll will be updated to reflect this change.
Class 2 National Insurance to be abolished
The Class 2 National Insurance charge for self-employed businesses applicable to those earning more than £12,570 has been abolished. This means that the flat rate compulsory charge of £3.45 a week is no longer applicable, this will save the average self-employed worker £192 a year.
Class 4 National Insurance reduced by 1%
Self-employed workers who pay Class 4 National Insurance at 9% on all earnings between £12,570 and £50,270 will see a reduction by 1% to 8% from April 2024.
National Insurance relief for employing Veterans
National Insurance relief for companies hiring eligible veterans will be retained for a further year.
Reduced planning permission time for growing businesses
To cut the time it takes in waiting for planning applications to be granted for businesses, the government will allow local authorities to recover the full costs if they can meet guaranteed faster timelines. If the faster timeline is not delivered, the business who submitted the application will be refunded in full and their application processed free of charge.
Triple lock pension rise
From April 2024 the government will increase the full new state pension by 8.5% to £221.20 a week, worth up to £900 more a year. Moreover, the Chancellor will be consulting on whether employees can have the right to request an employer pays into an existing pension pot.
If you would like to learn more about the latest changes announced by the Chancellor, you can review the full statement here.