An Autumn Statement for Growth, or ‘Too little, too late’?

Instead, the Chancellor went some way to spiking Labour’s guns by reducing tax for ‘working people’, a key Labour aim. However, the chosen route was National Insurance (NIC) – notionally not a tax, although you will never meet someone who thinks that!

• The main rate of employees’ NIC is to be reduced by 2%, to 10%, from 6 January 2024,
• The main rate of Class 4 NICs, paid by the self-employed, will be cut by 1%, to 8%, from 6 April 2024, and
• Class 2 NICs, again paid by the self-employed, will be abolished from 6 April 2024.

Welcome savings for most workers, while not providing a benefit to those who have investment income.

Companies will benefit from the ‘full expensing’ regime being made permanent, although what, in tax, is ‘permanent’?

Full expensing allows a 100% tax deduction for expenditure on qualifying assets, mostly plant and machinery, and a 50% deduction for expenditure on special rate assets.

The regime was introduced on 1 April 2023 for an initial period of three years and today’s announcement will allow companies to form longer-term investment plans.

Elsewhere, there was a little good news for companies who engage in research and development with the R&D intensives scheme being relaxed slightly with the intensity threshold being reduced to 30%. However, the scheme’s benefits remain significantly lower than the old SME scheme with the enhanced deduction having reduced from 130% to 86% and the repayable credit now being at 14.5%.

As previously announced, the RDEC and SME R&D schemes will merge from 1 April 2024. Again, there was a little good news with the above the line credit being taxed at 19%, rather than 25%, for loss making companies.

Despite the Chancellor’s claims that this was an Autumn Statement for growth, the Shadow Chancellor claimed that it represented a ‘cover version’ of Labour’s recent announcements. It felt as though she had a point.

She also said that it was ‘too little, too late’. Too late, maybe, but there is still a Spring Budget to address the ‘too little’!