Autumn Statement 2023: What it means for you

An Autumn Statement before an election year is usually an opportunity for a Chancellor to begin setting out his party’s stall and to deliver positive news for an electorate warming up to go to the polls.

Furthermore, with the Chancellor now finding himself with more in his coffers due to bumper tax revenues and inflation looking under control, we were primed for some good news. So, we were quite surprised to see few headline tax cuts and giveaways. Perhaps the Chancellor is saving the rabbit in his hat for the spring budget, or election manifesto.

Our take on the announcements

For workers and the self employed, the national insurance cuts will be very welcomed and will put cash straight into wallets. However, as the personal tax thresholds remain frozen at a time of high inflation, this tax boost may be countered by earnings being pushed into higher tax brackets.

For businesses, there is not too much to get excited about from these announcements. Many businesses will welcome the discounted business rates being extended for at least another year. With the National Living wage rising by more than a pound per hour, firms already feeling the pressure from increasing wage costs may be hit hard. Then there is the announcement billed as ‘the biggest business tax cut in modern British history’, the extension to full expensing. This will certainly be welcomed and useful for larger businesses investing in machinery and equipment. However, there is little real impact for SMEs, who can already get maximum tax relief for their capital expenditure via the £1m annual investment allowance.

We knew it was coming, but the merge of the SME and large company R&D tax credit schemes is a blow to small business who will see the overall benefit of claims reduce under a merged scheme. On the brighter side it does at least give us more certainty about the scheme and how it will operate moving forward, and it remains a valuable tax relief for businesses.

What might have been

In the weeks leading up to the Autumn Statement, there had been a lot of talk around inheritance tax. The Chancellor opted against tackling this contentious tax this time around. Could he be saving his plans to either reduce the rate or abolish the tax altogether for the Spring Budget or as an election manifesto? Also missing from the Autumn Statement was any further news on stamp duty land tax (SDLT). Again, the Chancellor may wait until the spring to make any bold changes on this.

We hope that you enjoy reading our highlights and summary guide, and as always, if you have any questions on how any of these measures affect you, please contact us.