Key Points Re: Autumn Budget, 22 November 2023

Yesterday’s Budget from the Chancellor revolved around making long-term decisions to promote growth, reduce debt, and support measures for the UK’s economic expansion. For a more detailed overview please click here for BDO’s analysis.

There will also be an Autumn Finance Bill 2023, which will be released soon, to implement various announced measures.

Economy & Growth

• The chancellor will invest an extra £4.5bn between 2025 and 2030 in manufacturing.
• About 1m will go to Aerospace companies & businesses working on green technologies.
• There will be new investment zones in Greater Manchester, and the west & east Midlands in addition, Wrexham in Wales.
• The chancellor is also exploring options for sale of some of the government’s state in NatWest, this will be done through a “retail share offer.”
• Freeports and investment zones will be given 10 years of financial incentives, rather than 5 currently planned.
• The Government will provide one simplified Research & Development (R&D) tax credit regime.

• The chancellor says forecasts show the economy will grow by 0.6% this year and 0.7% in 2024.

Wages & Benefits

• Employee National Insurance cut from 12% to 10% from 6^th January 2024, saving an individual on the average salary £450.
• National Living Wage increase by 9.8% to £11.44/hr from 6^th April 2024.  This will also be extended from the age of 21.
• Full state pension will increase by 8.5% which equates to an extra £900 a year.
• Work continues to establish a pension pot for life scheme giving workers the option to nominate the fund their employer pays into.  There is nothing specific on this yet.
• Benefits will be increased by 6.7%, with tougher requirements for those who claim them to look for work.

Business Tax

• Class 2 NI abolished for the self-employed and Class 4 reduced from 9% to 8% from April 2024.
• There will be business rates discount for hospitality, retail and leisure worth £4.3bn.

Inflation

• Inflation is expected to fall to 2.8% by the end of 2024.  Last week inflation was at 4.6%.
• It is predicted inflation will fall to 2% by mid-2025.
• Higher inflation will keep interest rates elevated with the Bank of England rate remaining around 4% until 2028.

Other information

• All alcohol duty will be frozen until August 2024.
• Local authorities will be able to recover the costs of major business planning applications if they meet guaranteed fast timelines.  This should cut the time it takes for planning applications.