Chancellor Jeremy Hunt recently unveiled the Autumn Statement (22nd November 2023), laying out the government tax spending plans for the upcoming year.

This is likely to be the last mini-budget by the government ahead of the general election. So we have summarised some of the key points from the Autumn Statement 2023 and how they may impact you as a business owner and your clients.

Key updates for small businesses

National Insurance reform for the self-employed

The reform of the Chancellor brings positive changes for the self-employed. Abolishing the Class 2 National Insurance, saving the average self-employed person £192 a year. Access to entitlements such as state pension and credits will be maintained in full.

Additionally, the Class 4 rate for the self-employed earning profits between £12,570 and £50,270 drops from 9% to 8%. This will save the average self-employed person £350 a year.

Living wage increase

Come April 2024, the national living wage rises from £10.42 to £11.44 an hour for workers over 23. This will also extend to include 21 and 22-year-olds. This may have an impact on small businesses. HR and payroll professionals must work with employers to ensure that they have budgeted for the new rate. Employers must comply with the latest rates of pay for staff.

Simplified Research and Development Tax Relief

The Research and Development (R&D) Tax Relief scheme offers support for companies working on innovative projects in science and technology. This will merge with the Research and Expenditure Credit (RDEC) in a bid to simplify things. The qualifying threshold will be lowered to allow more start-ups to qualify.

Making Tax Digital

There were initial MTD plans for self employed and the introduction would be staged. However, the Autumn Statement confirmed low-income taxpayers are exempt (for now).  The £30,000 entry threshold remains exempting small businesses with a gross total self-employment income below this. Roll-out will continue from April 2026 for those earning more than £50,000 annually.

Author: Mary Asante | HRi