The Chancellor of the Exchequer, Jeremy Hunt, delivered his 2023 Autumn Statement on Wednesday 22 November, reflecting on the growing strength of the UK economy, with an aim to cut taxes, reduce debt and reward work.
We've set out some of the key measures below:
Reduction to National Insurance Contributions (NIC)
For the self-employed the rate of Class 4 NICs, paid by the self-employed on earnings between £12,570 and £50,270 will be reduced from 9% to 8% from 6 April 2024. In addition, Class 2 NICs will be abolished from 6 April 2024 without impact to contributory benefits and the State Pension.
Additionally for the employed, the main rate of Class 1 employee NICs will be reduced from 12% to 10% from 6 January 2024.
Annual Tax On Enveloped Dwellings (ATED)
ATED annual charges will be increased by 6.7% from 1 April 2024 in line with the September 2023 Consumer Price Index.
Capital Allowances
In the Spring Budget 2023, the government replaced the super deduction regime with ‘full expensing’ for three years from 1 April 2023, allowing businesses to write off the full cost of qualifying plant and machinery investment against their taxable profits.
The Conservative government is now making this change permanent with a 100% first year allowance for main rate assets and 50% first year allowance for special rate (including long life) assets.
Real Estate Investment Trusts (REITs)
Further to the publication of draft legislation on 18 July 2023, amendments will be made to the existing rules for REITs to enhance the competitiveness of the regime. A number of the changes will have retrospective effect being part of a package of measures to “reduce unnecessary burdens and make the regime more attractive for investment in the UK.”
OECD Pillar 2
The UK has already committed to introduce the Multinational Top-up Tax (Income Inclusion Rule) and a Domestic Minimum Tax for account periods commencing on or after 31 December 2023. The Government will now also implement the Pillar 2 Undertaxed Profits Rule for accounting periods commencing on or after 31 December 2024. The introduction of the UTPR by the UK may prompt other jurisdictions to consider the timing of their own implementation of Pillar 2.
Tax avoidance, evasion and non-compliance
The UK is taking further action on tax avoidance by introducing additional and tougher measures applicable to promoters of tax avoidance; including a new criminal offence for those who continue to promote avoidance schemes after receiving a stop notice, and a new power enabling HMRC to apply to the court for a disqualification order against directors of companies involved in promoting tax avoidance. These new measures will take effect from Royal Assent of the Autumn Finance Bill 2023. In addition, HMRC will be provided with extra resources to ensure collection of owed taxes, amounting to approximately £5 Billion over the next five years.
Channel Islands impact
Whilst the Autumn Statement did not offer any major announcements affecting Channel Island individuals and businesses, some of the measures will have an impact on those with connections to the UK, particularly those with UK real estate interests.
If you have any questions, or would like to discuss any of the areas covered in our summary in more detail, please get in touch with your usual contact to discuss how the Budget might impact you or your business.
Contact us
