November saw the Chancellor deliver the Autumn Statement, which included several announcements relevant to UK businesses.
As we approach the end of 2023, here is the latest business and tax information you need to know.
National Insurance Cut
As announced in the Autumn Statement on 22 November, the main rate of employee National Insurance contributions would be reduced from 12% to 10%.
The reduction would take effect on 6 January 2024. Chancellor Jeremy Hunt said it would save an employee earning an average salary approximately £450 a year and benefit 28 million people across the UK.
Further reforms to National Insurance for self-employed workers were expected to save approximately two million people an average of £350 each year.
Compulsory Class 2 National Insurance contributions would be abolished for eligible self-employed workers, while the main rate of Class 4 National Insurance would be reduced from 9% to 8% on profits between £12,570 and £50,270.
Inflation Target Reached
Earlier in the month, the government announced that it had reached its target of halving inflation during 2023.
The Autumn Statement outlined forecasts for inflation to fall to 2.8% by the end of 2024 and reach the Bank of Englands 2% target during 2025.
The Office for Budget Responsibility reported that the UK economy was expected to grow by 0.6% during 2023, followed by forecast growth of 0.7% in 2024 and 1.4% in 2025.
National Minimum Wage Increase
The National Living Wage, which stood at £10.42 per hour for workers aged 23 and over, would increase to £11.44 from April 2024.
Eligibility would also be extended to include all workers aged 21 and over.
Minimum wage rates for younger workers would also increase, while the apprentice rate would rise from £5.28 to £6.40 per hour.
Business Support
The existing Research and Development Expenditure Credit and SME research and development tax-relief schemes would be combined into a merged scheme.
The notional tax rate applied to loss-making, research-intensive SMEs within the enhanced support scheme would be reduced from 25% to 19%.
The full-expensing scheme, which was originally due to expire in 2026, would be made permanent.
This would allow qualifying companies to deduct the full cost of eligible machinery and equipment from their taxable profits during the year in which the investment was made.
The 75% business-rates discount for eligible retail, hospitality and leisure businesses would be extended for another year.
Local authorities would also be allowed to recover the full cost of processing major business planning applications in return for guaranteeing faster decision-making times.
If the agreed timeline was not met, the business would receive a full refund and its application would continue to be processed without charge.
Investment Zones
Freeports and investment zones would receive financial incentives for 10 years, extending the original five-year period.
Three additional investment zones would be created in the West Midlands, East Midlands and Greater Manchester. A second investment zone would also be established in Wales.
Looking Ahead
That is all the news from November. As we move into the final month of the year, remember to follow the latest business and tax announcements.
Have a wonderful December!