Autumn Statement
Yesterday, Chancellor Jeremy Hunt delivered his Autumn Statement. The Chancellor said this Autumn Statement included 110 measures to “Help grow the British economy and back British business”, but were today’s announcements in line with this promise?
Our Autumn Statement Summary is a more detailed review and can be downloaded via the link below. Below that, I’ll give my immediate thoughts on some of the major issues as they might impact on our clients.
National Insurance
Any cut in tax (and NIC is a tax by another name) is welcome but is unlikely to offset additional income tax which will be payable by the ‘fiscal drag’ effect of the freeze on personal tax allowances and tax bands. More detail on this is given in our downloadable summary.
Full expensing and Corporation Tax
Full expensing allows companies to deduct the cost of qualifying plant and machinery from their taxable profits immediately. It has no expenditure limit, unlike the existing Annual Investment Allowance which has a £1m per annum cap. I think this will benefit big business (and so hopefully the economy) but is unlikely to affect most small business owners.
R&D tax relief
I don’t really see any good news here. A new “simplified” scheme will apply from 1st April 2024 and merge the two existing small company and large company schemes. There’s more detail in the downloadable summary but there is now a reduced benefit, additional compliance to claim the relief, HMRC’s current more intransigent attitude to claims, and additional complexities introduced. Many SMEs will find the benefit of the relief intended to “drive innovation” has been significantly eroded by recent changes.
Pensions
The Chancellor announced a consultation will take place on giving savers a legal right to require a new employer to pay pension contributions into their existing pension policy, meaning people can move to having one pension pot for life. Good news, I think, for employees. However, this will be more work for employers if this comes into force.
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