Earlier today, Chancellor Jeremy Hunt announced a range of key measures in the Autumn Statement 2023 that he hopes will shore up votes for the Conservative Party in the forthcoming general election.
Here are the main announcements and their potential implications below.
The headline announcements were:
The difficulty for the Chancellor is that many of these taxpayers are already paying record rates of taxation and national insurance, aligned with significant cost of living rises at the checkout and for their utilities. In addition, with inflation still running at around 4.6%, the costs are still increasing and unfortunately many taxpayers will not feel the benefit of these tax cuts in their pockets.
Furthermore, the freezing of the personal allowances and tax rate bands act as stealth taxes, pushing taxpayers into higher rates of tax and reducing spending capacity.
For businesses, there’s the welcome permanent extension of tax expensing for purchases of plant and machinery, which was otherwise going to expire in 2026. We just hope that this is a final change in this area after years of flip-flopping by the Government on the value of tax incentives.
The extension of business rates reliefs for the Retail. Hospitality and Leisure sectors will be very welcome for impacted businesses, though again as they’ve already been benefiting from this relief, it’s not necessarily a measure that will make them feel better off.
The Government are moving ahead with the reform of Research and Development tax reliefs. This involves combining the two current schemes, the SME scheme and the RDEC scheme for large companies, into a single scheme based on the RDEC model, starting from 2024.
The Government remains committed to the roll out of Making Tax Digital (MTD) for Income Tax for unincorporated businesses with effect from April 2026. These changes will increase the tax administration work undertaken by most businesses that will need to adopt MTD in this way.
This summary is prepared shortly after the Chancellor has delivered his speech, and we will be analysing the hundreds of supporting pages of documents released alongside the speech. Look out for our detailed budget briefing which will be released later this week.
Lubbock Fine remain committed to supporting our clients through these changes. If you need guidance regarding any of the above topics, please get in touch with Partner, Phil Blackburn (email@example.com)