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2023 Autumn Statement
By Stacey McVeighty | Wednesday, 22nd November 2023
First things first, if you are a director of a limited company who does not invest in assets worth more than £1m - you may be excused from the rest of this email, nothing for you here... I am being mildly sarcastic, there are a few things that may interest you:
1. If you are an employer, then the minimum wage (NMW/NLW) is increasing to £11.44 per hour. The lower band for 21-22 year olds has been removed, so they too will receive the higher amount. The apprentice rate & the 16-17 band is going up to £6.40 and the 18-20 year olds up to £8.60.
This means that you will also see an increase in employers NI for these employees, as well as increased pension contributions. As an example, if you employ 10 people, all on the NMW, then your costs will increase by circa £20,000 a year from April. You need to start looking at your cash flow and pricing now if this is going to impact you.
2. While we are discussing employees, there will be a consultation in respect of pension schemes, to let employees choose where you pay their auto-enrollment pension. This could mean that you (or more likely we) will have to report to multiple different pension schemes each month. They are also changing the disclosure you have to make about how many hours each of your employees are working every month/week. All these changes are going to make payroll far more time consuming but also give HMRC a great excuse for tax enquiries.
3. If you do happen to spend a lot of money on assets, more than £1 million, you will be delighted to hear that full expensing of assets is staying - at great cost to the Exchequer. If you don't spend that much... no changes to capital allowances for you.
4. There is no change to corporation tax.
Self Employed
5. Class 2 NI has been axed... now don't get too excited. It will save you all of £180 a year and I'm not entirely sure how you will prove you are entitled to the state pension... maybe Hunt was trying to drop a hint that there won't be a state pension to worry about...I joke, I think they intend to make it one of those 0% taxes (you know the ones that can easily change) and that way you will get a pension "stamp".
6. But that's not all, Class 4 NI (basically another tax) is being cut by 1%. You pay Class 4 NI when your profits are over £12,570. This will be 8%. If you make profits of £30,000 then you will save £174. I know...what on earth will you spend your windfall on?
Employees
7.If you are an employee that pays NI, then your NI is going to be cut by 2% from January. That will upset all the payroll software providers and my payroll department, as it will be a bit of a headache but ensures the cuts are brought in before the next election.
In other news:
8. The R&D changes that were proposed in Spring Statement, combining the SME & RDEC schemes are going ahead, I will let you know more detail when I receive it.
9. £5bn for HMRC, apparently to help them ensure everyone pays the correct amount of tax but maybe they could use some of it to get the post opened and replied to within 12 months and for someone to answer the phone every now and again.
10. All the usual Budget Bingo stuff... freezing alcohol duty, investment zones, increasing the state pension etc etc
11. This one is very important for a small number of clients. If you tender for government or public sector work, then you need to ensure that all your suppliers are paid within 30 days (they are kicking this off with 55 days to start with)
12. Finally, if you pay business rates, then the 75% business rates relief is being extended to 2025.
Of course next year we will have a General Election, so we can expect all sorts of tax chaos... luckily you have us to guide you through the fun.
This update does not constitute advice, it is opinion and information. You should speak to a professional adviser if you need advice and before you make any decisions. Change Accountants does not accept any liability on decisions made based on the above.