Jeremy Hunt has delivered the much anticipated Autumn Budget to parliament, addressing how the government will put the economy back on track.
The key priorities set out by the Chancellor include avoiding big government spend, and cutting tax. By reducing debt and borrowing, the Government can control inflation better, which can impact mortgage rates and help to fund public services.
Growth
Forecasts show the economy will grow by 0.6% this year, with an estimate of growing 0.7% in 2024. This is a step in the right direction, as it is 1.8% higher than it was before the pandemic.
Autumn Budget 2023
In essence, the budget sets out tax cuts to avoid high tax.
Taxes
With inflation declining, the government can return some money to taxpayers and ensure that workers keep what they earn.
From 6th January 2024, the main rate of employee national insurance contributions will be cut by 2%, down to 10% for Class 1 NICs. Rates paid by the self-employed through Class 4 NICs will be cut from 9% to 8%.
Alcohol duties have been frozen until 1st August 2024.
Business Tax
The Full Expensing Capital Allowance has been made permanent, allowing companies to deduct spending on new machinery and equipment.
There will be a business rates discount for hospitality, retail and leisure worth £4.3billion.
Public Spending
The government will focus spending on tackling waste, which has been at the forefront of plans for the last few years.
Inflation
The good news is that inflation is set to fall to 2.8% by the end of next year, however it will stay higher for longer and not drop into the 2% target until 2025.
Wages
New rules for work have been set out, as those claiming benefits will soon have to do mandatory work experience if they do not find a job in 18 months. The local housing allowance will be increased for the first time since 2020, and benefits will be increased by 6.7%.
The National Living Wage will increase to £11.44 in April for those 21 years old and over, whilst the State Pension will be increased by 8.5%.
Economy
There will be an extra investment of £4.5billion into the manufacturing industry between 2025 and 2030, whilst £1million will go to aerospace companies and those working on green technologies.
There will be investment areas throughout the nation to tackle low employment in key regions.
If you want to discuss how these changes will affect you or your business, or if you need business advice, help with business accounting or support on tax, get in touch with our specialist accountants at James & Uzzell today to see how we can help.