Autumn Statement 2023 at a glance

Chancellor's Autumn Statement 22 November 2023

Download our full summary (pdf)
Download 2024/25 Tax Tables (pdf)

The fall in inflation in October 2023 to 4.6% gave the Chancellor a much-needed boost ahead of his second Autumn Statement, as his main aim had been to reduce inflation. Now he appears to have gone full Liz Truss and is pushing for growth. How will the markets react?

Added to that are greater than expected tax revenues, meaning the Chancellor has the headroom to boost growth through tax cuts and business reliefs.

This is a complete reversal of only last weekend's position when both the Prime Minister and Chancellor, were united in saying "there is no way we can reduce taxes", to "now is the time to cut taxes and get growth going". When was this great Damascene moment that made both Sunak and Hunt have a sudden change of heart?

Whenever it was, the key balancing act will be to avoid increasing the rate of inflation, and putting pressure on interest rates, particularly when around 10% of tax revenues already go on servicing government debt interest payments. Debt is 94% of GDP.

Will it save Hunt's job or will he be replaced for the Spring 2024 Budget? He may have a passion for dancing the Lambada, but he's going to need some nifty footwork to keep the economy on the right track ahead of an election.

As well as cuts to National Insurance and business taxes, benefits will rise with September's inflation figures and state pensions in line with earnings. The national living wage will rise by almost 10% next year too. The freezing of allowances means more income will be taxed (fiscal drag) as tax thresholds have not increased in line with inflation..

Could the fact that the employee NIC cut will be applied from January 2024 rather than April mean that there could be a May election rather than later in the year?

Cuts to income and inheritance tax are more likely in the spring.

Check out our Private Client perspective on the Autumn Statement.

Brief recap – key changes previously announced:

Personal tax thresholds, CGT IHT etc. limits all frozen until 2028
Tax free allowance for capital gains reduced from £6,000 to £3,000 in 2024.
Stamp Duty Land Tax cuts announced in Truss's Budget to end on 31 March 2025. 
The tax-free dividend allowance to be reduced to £500 in 2024.
Full Capital Expensing in place until 2026, so every £1 a company invests in IT equipment, plant or machinery can be deducted in full from taxable profits..

Autumn Statement 2023 key measures announced:

Taxes

All alcohol duty frozen until August 2024
Single R&D scheme from April 2024, as expected
Class 2 NIC - abolished from 6 April 2024. That’s a tax cut of £350 for the average self-employed person earning £28,200 a year. Voluntary contributions will continue
Class 4 NIC at 9% - cut to 8% from April 2024
From 6 January 2024 Employee National Insurance Contributions will drop from 12% to 10%, giving us a hybrid rate. (see NIC factsheet)
Increase in the National Living Wage to £11.44 per hour
An extension of Full Expensing relief for companies - making it permanent (and a new technical consultation on wider changes to the capital allowances)
Changes to ISAs such as being able to open more than one ISA of the same type each year. This provides savers more choice over their investments & financial futures.
Off-Payroll rules changes will allow HMRC to account for taxes already paid when calculating a deemed employer’s PAYE liability under the off-payroll working rules.
No mention of the widely anticipated changes to the Employee Ownership Trust rules, providing a short window of opportunity for businesses considering a transition to all-employee ownership.

Spending

110 measures to boost growth and skills, including £4.5bn for manufacturing sector
A further £50m for a 2 year apprenticeship pilot, exploring new ways to stimulate training in growth sectors.
Boosting foreign direct investment
Pensions triple lock rises with earnings (8.5%) from April 2024
Working age benefits will rise by the rate of inflation at 6.7% from April 2024.
Local Housing Allowance to rise across the UK and providing £120m to prevent homelessness. This is in addition to £1bn+ already provided through the Homelessness Prevention Grant between 2022-25.
An additional £10m to support veterans - helping to fund mental health services for veterans in their communities across the UK
Proposals that those living closest to new electricity infrastructure will receive up to £1k a year off their energy bills.
£250 million to invest alongside UK pension funds in thriving tech sectors.
Options are being explored for a retail offer of NatWest group shares as part of plans to reduce the government’s stake.
To boost the industry for the future, a further £500m is being committed, helping to fund the next generation of supercomputers & AI innovation.
To boost global competitiveness, government will work with the industry to provide additional tax relief for visual effects expenditure - helping to attract more investment into the UK.
£4.5bn to support UK manufacturing. Boosting jobs across the UK, safeguarding energy security, building health resilience and preparing for a green future.
£150m Investment Opportunity Fund, Investment Zone programme, and extension of Freeport tax relief
3 new Investment Zones across England.
Business rate relief - small business multiplier frozen for a further year, and 75% relief for hospitality sector frozen for another year
Childcare from April 2024 - 30 hours per week covered
More investment in helping people with health conditions to find work
Following the scrapping of tampon tax, the 0% rate of VAT is expanded to include period underwear.

Tax Tables 2023/24 and 2024/25

Tax Tables 2024/25 (inc.. 6 Jan 2024 NIC change)
Tax tables 2023/24

Links to HM Treasury pages

The Scottish and Welsh Budgets were both published on 19 December 2023.

Finance Bill 2023

Draft Finance Bill 2023, based on the Autumn Statement, has been published

National Insurance

The changes to National Insurance, which will take effect on 6 January 2024 for employees and 6 April for self-employed people, are being legislated through a separate Bill - The National Insurance Contributions (Reduction in Rates) Bill.