Autumn Statement 2023 Key Points and OBR Forecasts  

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Written by: Liez Comendador
Autumn Statement

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On 22 November 2023, Chancellor of Exchequer Jeremy Hunt announced the Autumn Statement for the year, alongside the Office for Budget Responsibility’s (OBR) economic forecasts. The statement lays out tax and wage reforms and spending plans with three priorities: to halve inflation, boost the economy, and curb debts. Here are the key points:

National Insurance (NI) 

  • In January 2024, Class 1 NI rate will be cut from 12% to 10%, affecting 27 million employees. 
  • In April 2024, Class 2 NI will be abolished for the self-employed who earn more than £12,570. 
  •  In April 2024, Class 4 NI rate for the self-employed will be cut from 9% to 8%. 
  • Approximately 29 million people will benefit from reduced NI rates. 

National Living Wage (NLW)

  • In April 2024, Class 2 NI will be abolished for the self-employed who earn more than £12,570. 
  • The new rate applies to eligible 21-year-old employees for the first time, rather than those aged 23 and over. 

Capital Allowance

  • The Spring Budget 2023 last 15 March this year introduced a three-year “full expensing” capital allowance (replacement to the super deduction regime), effective since April 2023. The Autumn Statement made it permanent for three years, effective until 31 March 2026. 
  • The “full expensing capital allowance means total write-off of eligible plant and machinery investments from businesses’ taxable profits.

Corporation Tax

  • No changes were announced, as well as with income tax. Rates remain the same. 

Research & Development (R&D)

  • The R&D Expenditure Credit (RDEC) and SME schemes will be merged. Beginning 1 April 2024, expenses will be claimed via the merged scheme. 
  • Under the merged scheme, loss makers pay 19% tax instead of 25%. 
  • Additional support to R&D-qualifying, loss-making SMEs will be lowered from 40% to 30%, bringing another 5,000 SMEs under the scope of support.  
  • Beginning 5 April 2025, Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) reliefs will expire. 
Autumn Statement 2023

Pension

  • The “triple lock” for state pension (basic state pension, new state pension, and pension credit) remains. 
  • Beginning April 2024, state pension payments will increase by 8.5%.

Other Benefits

  • In April 2024, Wales and England’s universal credit and other working-age benefits will increase by 6.7%. 
  • In April 2024, local housing allowance rates will be increased to 30%. 
  • Over the next five years, £1.3 billion funds will support people with health conditions finding jobs. 
  • Another £1.3 billion will support people who have been unemployed for more than a year. 
  • Wales and England claimants who refuse to work despite being deemed “able” to work will lose access to their support. 

Other Business & infrastructure Announcement  

  • Beginning 1 April 2024, the Annual Tax on Enveloped Dwellings (ATED) will increase by 6.7%, aligned with the latest Consumer Price Index (inflation rate). 
  • Over the next five years, the government will allot a £4.3 billion business support package to small businesses and those in the Retail, Hospitality, and Leisure (RHL) niche. 
  • Retail, hospitality, and leisure firms in England will have a year extension for 75% business discount rates. 
  • Households near pylon and transmission infrastructure will get energy bill reduction capped at £1,000 per year for a decade. 
  • Strategic manufacturing sectors (e.g., aerospace, green energy, zero-emission vehicles, etc.) will attract more investors via £4.5 billion funding.  
  • Intelligence innovation centres will receive approximately £500 million support over the next two years. 
  • Leveling up partnerships in Scotland will receive £80 million funding.  

Office for Budget Responsibility (OBR) Forecasts 

  • The economy will grow by 0.6% this year, 0.7% in the next year, 1.4% in 2025, 1.9% in 2026, 2% in 2027, and 1.7% in 2028. 
  • The next year may be tougher due to the impact of interest rates. 
  • The Autumn Statement will lead to an increased business investment of £14 billion and approximately 78,000 more employed people. 
  • Combining the Spring and Autumn policies, employment will increase and add approximately 200,000 more employed people overall.  
  • Borrowing will be lower this year and the next. Underlying debts will begin to fall off beginning 2027-28. 

For more tax and business updates, be sure to subscribe to our monthly newsletter. Legend Financial is a renowned tax, accounting, and business development firm in the UK. For enquiries or assistance, talk to us today! 

REFERENCES: 

Autumn Statement 2023 (HTML). (22 November 2023). Retrieved from Gov.UK:
https://www.gov.uk/government/publications/autumn-statement-2023/autumn-statement-2023-html 

Autumn Statement 2023: A summary. (22 November 2023). Retrieved from House of Commons Library:
https://commonslibrary.parliament.uk/research-briefings/cbp-9892/ 

Six things we learnt from the 2023 autumn statement. (22 November 2023). Retrieved from Institute for Government:
https://www.instituteforgovernment.org.uk/
comment/six-things-look-out-2023-autumn-statement
 

Autumn Statement 2023. (22 November 2023). Retrieved from PWC:
https://www.pwc.co.uk/budget.html 

Autumn Statement 2023: National Insurance and more key announcements by Jeremy Hunt. (22 November 2023). Retrieved from BBC:
https://www.bbc.com/news/business-67276717 

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  • Junaid Usman

    Apart from being a partner at Legend Financial, Junaid is an expert on Business Tax including business management advisory services which has proven in the growth of company. He is a promising advisor with an ideology; "Any business success depends on the level of objectivity it maintains."

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