The Chancellor gave his Autumn Statement on 22 November 2023.  Significant announcements were:

National Insurance: cuts for employees and self-employed from 1 January 2024.

  • Employee NICs reduced from 12% to 10%
  • Class 2 NICs abolished from 5 April 2024
  • Class 4 (self-employed) NICs reduced from 9% to 8%

Capital allowances: Annual Investment Allowance at 100% on up to £1m of qualifying capital expenditure, and ‘full expensing’ for qualifying expenditure on plant & machinery beyond that (for companies only).

Working age benefits: uprated by 6.7% for 2024/25.

State pension: uprated by 8.5% for 2024/25.

National Minimum Wage: increased by 9.8% to £11.44 per hour for 2024/25 for workers aged 21 and above.

Making Tax Digital (MTD) for income tax will apply from April 2026 for sole traders and landlords with gross income exceeding £50,000.  They will be required to keep digital records and submit a quarterly summary using MTD-compatible software.

Business rates: support package worth £4.3 billion.

Unincorporated businesses: (ie sole traders and partnerships) that prepare year-end accounts to a date other than 31 March or 5 April will be required to change to a 31 March year-end from 2024/25.  Cash basis for preparation of accounts will become the default for all unincorporated businesses.

VAT registration threshold unchanged at £85,000.

Income tax rates unchanged and thresholds frozen:

Basic rate             £0 – £37,700                   20% (Dividends 8.75%)

Higher rate          £37,701 – 125,140          40% (Dividends 33.75%)

Additional rate  Over £125,140                  45% (Dividends 39.35%)

Dividend allowance: £500 for 2024/25, down from £1,000 for 2023/24.

Tax relief for pension contributions: max £60,000 annual allowance for most taxpayers.  Reduced annual allowance for those with income > £260,000.

Capital gains tax: annual exemption £3,000 for 2024/25, down from £6,000 for 2023/24.  Tax rates from 10% to 28% depending on circumstances.

Inheritance tax: Nil rate band frozen at £325,000 until April 2028.  Residence nil rate band also unchanged at £175,000.

Corporation tax at 25% on profits above £250,000; and at 19% on profits up to £50,000; transitional marginal rate of 26.5% between these limits.

R&D: significant changes in the R&D regime from April 2024.