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What the Autumn Statement Could Mean for Your Business

The annual autumn statement is always something business owners should consider, so what does this one mean for you?

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The Autumn Statement 2023

Last month Chancellor Jeremy Hunt delivered an Autumn Statement, in which he laid out changes in the way the UK Government collects tax. The statement included several updates, some of which will have a direct impact on your business. 

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The Statement at a Glance

  • According to the chancellor, the Office for Budget Responsibility forecasts show that the UK's economy will grow by 0.6% this year and 0.7% next year.
  • As a whole, the UK's economy is now 1.8% larger than it was before the COVID-19 pandemic.
  • State benefits are to be increased by 6.7%, but more pressure will be put on those who claim them to find work.
  • Inflation (the rate at which prices rise) is expected to fall to 2.8% by the end of 2024. This is according to the spending watchdog and is a dramatic fall from the 11.1% rate this time last year.
  • A business tax discount will be implemented for the hospitality, retail and leisure industries. The chancellor says the discount is worth £4.3bn.
  • The Government will invest an extra £4.5bn in manufacturing between 2025 and 2030.
  • About £1m will be invested in aerospace companies and businesses working on green technologies.
     

Changes for Businesses

Some of the changes mainly impact your employees. There will be a cut to national insurance, for example, which will see contributions come down from 12% to 10% from January next year. There will also be a boost in the national living wage, which will rise to £11.44 in April. This will impact any employee you have who is aged 21 and over.

The Climate Change Agreement Scheme will also be extended, which will give energy-intensive businesses around £300 million of tax relief every year until 2033. This is to encourage investment in energy efficiency and support the Government's planned transition to Net Zero.

What do the Changes Mean for my Small Business?

The most significant news for your business is that some taxes will be cut. The main cut will be implemented for the hospitality, retail and leisure industries. The chancellor says this discount is worth £4.3bn. 

Another change that has the potential to affect your business directly is the change to the national living wage. The rise (which is due to change to affect any worker 21 and over) is the biggest increase in recent years and may mean your business needs to increase pay for its employees. 

Class 2 National Insurance, which self-employed workers pay if they earn profits over £12,570, is being abolished, while class 4 National Insurance for the self-employed is to be cut from 9% to 8%; this will mean a maximum annual saving of £377.

A business rates support package, worth around £4 billion over the next five years is aimed at helping high street shops and protecting small businesses. It's hoped that this will protect around 90% of ratepayers. 

Another measure that could benefit your business is the introduction of tougher regulations on late payers. This is aimed at ensuring SMEs with tight budgets are paid more timely than has previously been the case, meaning more certainty in your business's finances. 

Are There Any Policies Aimed at Big Businesses?

Yes. The Chancellor also made the formerly temporary policy, full expensing, permanent. The policy means businesses can claim 100% tax relief on machinery they buy for their business, and it will now be a permanent measure. However, most smaller businesses won't see much benefit as the policy is aimed at bigger companies.  

Get Your Accounting Quote Today

Despite being informed about all the new changes, you could still be confused about the technicalities. if you are, we're here to help. 

Picking the right accountant for you might seem as difficult as making sure HMRC doesn't fine you for some trivial thing, but it doesn't have to be - Not if you use our service!  

Just tap the button below and answer a few questions about your business to get a range of free quotes tailored to your specific business needs.

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