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Autumn Statement 2023




The Chancellor unveiled his Autumn Statement on 22 November 2023. There were a number of noteworthy announcements included – some of the key items are covered below.


For Businesses

Capital allowances

The Government has confirmed that full expensing will be made permanent, giving upfront relief for the full cost of qualifying expenditure on new plant and machinery (except cars or assets acquired for leasing), as well as a 50 percent first-year allowance for special rate expenditure.

 

Research and Development

The two Research and Development (R&D) tax relief schemes currently available in the UK, the ‘SME’ and the ‘RDEC’ scheme, are to be merged into a single simplified scheme for accounting periods beginning on or after 1 April 2024. The measures overall seem positive although still quite complex – payable tax credit rate to increase to 14.5%.

 

Business rates

The small business multiplier will be frozen for a further year, and the 75 percent discount on rates

for the retail, hospitality and leisure industry (up to £110,000) is extended to apply for another year. The standard multiplier will be ‘uprated’. Changes to take effect from 1 April 2024.

 

Audio visual expenditure credit

The Government confirmed its intention to replace the existing film, TV and video games tax reliefs with ‘refundable expenditure credits’ — an Audi Visual Expenditure Credit (AVEC) for film and TV programmes, and a Video Games Expenditure Credit (VGEC) for video games. The credits will be available from 1 January 2024 and existing reliefs will cease to be available from 1 April 2027.

 

For Employers

National Insurance Contributions (NIC)

No changes were announced regarding Employers NIC.

 

Enterprise Management Incentives

There will be an extension of the deadline for notifying HMRC of a grant of EMI options from 92 days following the grant to the 6 July following the end of the tax year in which the grant was made. This will apply to EMI options granted from 6 April 2024.

 

Real Time Information (RTI)

New requirement to provide more detailed information on employee hours paid via RTI reporting. To take effect from April 2025.

 

Construction Industry Scheme (CIS)

A number of changes taking effect from April 2024 to combat fraud, reform of the Gross Payment Status, and digitalization of CIS applications.

 

For Individuals

National Insurance

From 6 January 2024, Employees NI will be reduced from 12 % to 10 % - a good saving for every employee. For the self-employed, from 6 April 2024 Class 2 NIC will be abolished, although some exceptions will apply. The Class 4 NIC rate will be reduced from 9 % to 8 %. NICs relief for eligible veterans is extended for one year covering 2024/25.


Making Tax Digital for Self-Assessment (MTD ITSA)

The Government has announced a package of design changes intended to simplify and improve MTD ITSA when it is introduced in April 2026. Although there are some sensible improvements, the switch to MTD ITSA remains a significant concern for many individuals, especially those who manage their own tax affairs.

 

Self-Assessment and PAYE

Individuals with income taxed only via the PAYE system will no longer be required to file self-assessment tax returns from 2024-25 – this will allow many taxpayers to opt-out of self-assessment filing.

 

Pensions

As announced at Spring Budget 2023, the Government will introduce legislation in Autumn Finance Bill 2023 to abolish the Lifetime Allowance with effect from 6 April 2024. The measure will clarify the taxation of lump sums and lump sum death benefits, and the application of protections. It will also clarify the tax treatment for overseas pensions, transitional arrangements, and reporting requirements.

 

Authored by: Cambridge Team

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