Here is what we know so far. Please note that this may be updated as further information becomes available.
Inflation Predicted to Fall to 2.8% Over The Next Year
This will mean the rate at which costs increase for businesses and consumers will reduce. It may also lead to interest rates beginning to fall, making it cheaper to borrow loans for business growth.
Growth Forecasts Downgraded
This will mean lower growth of the economy than predicted in March, but recession will be avoided.
National Living Wage Rise
National Living Wage will rise to £11.44 an hour for everyone over the age of 21. This will mean higher wage costs for businesses, but people would have more money to spend on goods and services. It will also rise for those below the age of 21, and for apprentices.
See https://www.gov.uk/national-minimum-wage-rates
Employee National Insurance Cut From 12% to 10%
This will mean employees/ directors pay less National Insurance and so take home more money in their wage packets from 6th January. However, the government have frozen the thresholds at which this starts being paid.
Self Employed Class 2 National Insurance Abolished and Class 4 reduced from 9% to 8%
This means that the self-employed (sole traders/ partners) will pay less National Insurance in their self-assessment tax bills.
Capital Investment
Full amount of investment can be claimed against tax permanently. Previously there was a limit on how much of investment in plant, machinery or technology could be claimed against corporation tax. From now on, everything you invest can be claimed as an expense against tax in that year. (For special rate assets it is 50%). This doesn’t include cars. It also excludes sole traders and partnerships but they do benefit from the £1 million Annual Allowance which does the same thing.
Freezing The Small Business Multiplier
Freezing the small business multiplier and extending the 75% discount for retail, hospitality and leisure businesses for another year. This will mean business rates for small businesses, especially those in retail, leisure and hospitality will continue to pay lower levels of business rates.
Consultation on Employee Pensions
The government will consult on giving employee’s the right to insist employers pay their auto-enrollment pensions into the employee’s existing pension provider instead of the one set up by an employer.
Planning System Changes
Local authorities will be able to charge higher rates for planning applications in return for them being decided much quicker (otherwise the fee is refunded). This should speed up businesses getting planning permission.
R&D Tax Relief
- The various schemes are being merged.
- The R&D tax rate applied to those making losses due to R&D will fall from 25% to 19%.
- For businesses that invest 30%+ of expenses on research and development (rather than the 40% previously announced) and make a loss, they can get extra tax relief.
Other Measures
- There were investments announced in various tech, AI and manufacturing projects, new innovation centres and investment zones.
- Alcohol Duties will be frozen until 1st August 2024
- Pensions will rise 8.5% in April under the Pensions Triple Lock
- Social Security payments will rise by 6.7% in line with September’s inflation figure.
- Further welfare reforms will mean many of the long term sick and disabled, along with the long term unemployed, will need to work or will lose their social security payments. The government will set up programmes to help people find work.
In total, the Chancellor announced he had 110 growth measures. You can find more details in the government documents here -
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