In yesterday's Autumn Statement, the Chancellor of the Exchequer, Jeremy Hunt MP, announced several big changes to the tax system that could have an impact on your business and workforce. The biggest change announced was a 2% cut in the main rate of Employee National Insurance, which will come into force in January 2024.
The Chancellor also announced that from 1st April 2024, the National Living Wage (NLW) will increase by 9.8% to £11.44 an hour for eligible workers across the UK aged 21 and over. This is a significant increase both as a percentage, but it also includes a new age group in the mainstream NLW category, as it previously applied to eligible workers aged 23 and over.
The most positive news was that the Full Expensing scheme will be put on a permanent footing, allowing businesses to invest for the long term. This will allow companies to claim 100% capital allowances on qualifying main rate plant and machinery investments, meaning that for every pound invested its taxes are cut by up to 25p. Like many business groups, Walpole has been asking the Treasury to make this scheme permanent.
The temporary freeze to alcohol duty and additional Government support aimed at investors are also welcome news.
Disappointingly, while Tax-Free Shopping was mentioned, the Chancellor did not take this opportunity to reintroduce the scheme. Instead the Treasury said it was "grateful for industry submissions" and they "will continue to accept representations and consider this new information carefully, alongside broader data."
Responding to the announcement, Walpole CEO Helen Brocklebank said: "It is disappointing that the Chancellor didn’t listen to the voices of British businesses, which have been calling for a return of Tax-Free Shopping. The Treasury’s position continues to make the UK less competitive compared to our European neighbours. This not only drives tourist spending to Paris, Milan and Madrid, but investment as well. At a time when the Government is rightly focused on driving more investment into the UK, it is baffling that he continues to ignore this much needed reform.
"However, it is encouraging that the Treasury has agreed to continue to accept representations from businesses on this issue. I would encourage every business affected to contact the Treasury and provide any data you have.
"More welcome is the announcement that full expensing will be made permanent, this will help support UK manufacturing, which is a hallmark of British luxury. I hope that the Chancellor will now listen to our calls for an extension of this scheme to secondhand plant and machinery, which would benefit heritage craftspeople and sustainability focused businesses."
> How will the Autumn Statement affect your business? Email our public policy team to let Walpole know
Photo courtesy of Number10
