Chancellor Jeremy Hunt's Autumn Statement 2023 introduces significant changes affecting small businesses in the UK. While not as extensive as previous measures, these updates require careful consideration and planning. Here's a breakdown of the key announcements:
Business Rates: A new £4.3 billion business rates support package for England over the next five years.
Notable measures include a frozen small business multiplier at 49.9p, a standard rate increase to 54.6p, and continued relief for retail, hospitality, and leisure sectors.
National Living Wage (NLW): NLW rises from £10.42 to £11.44 per hour from April 1, 2024.
Eligibility broadens to include employees aged 21 and over, potentially requiring businesses to allocate an extra £1,800 annually for a full-time worker.
National Insurance: Reduction in National Insurance contributions for Class 1 employees (under state pension age) from 12% to 10%.
Self-employed main rate cut to 8% from 9% starting April 6, 2024.
The lower earnings limit remains frozen at £6,396.
Implications for Business Owners: Immediate payroll changes are required by January 6, 2024.
Self-employed individuals stand to benefit, with an average annual increase of £350.
Capital Allowances: Full expensing for qualifying machinery and equipment made permanent, promoting tax relief.
No predefined list; eligibility depends on business nature.
Upcoming simplification efforts for capital allowances, focusing on extending relief to leased items.
Tax Changes for Small Businesses: Default cash-based accounting becomes the norm from April 6, 2024, simplifying income tax profit calculations.
Making Tax Digital (MTD) updates from April 2026, emphasizing the use of compliant software or accounting methods.
R&D Tax Relief: Merger of R&D Expenditure Credit (RDEC) and SME schemes.
Loss-making companies under the merged scheme are taxed at 19% (down from 25%).
The intensity threshold for the R&D intensives scheme was reduced to 30%, allowing more SMEs to qualify for enhanced relief.
A one-year grace period for businesses missing the new threshold, applicable from April 1, 2024.
These changes necessitate a thorough review of financial strategies, budgetary considerations, and operational processes. Please feel free to reach out for further clarification or assistance in navigating these adjustments.
Business Rates: A new £4.3 billion business rates support package for England over the next five years.
Notable measures include a frozen small business multiplier at 49.9p, a standard rate increase to 54.6p, and continued relief for retail, hospitality, and leisure sectors.
National Living Wage (NLW): NLW rises from £10.42 to £11.44 per hour from April 1, 2024.
Eligibility broadens to include employees aged 21 and over, potentially requiring businesses to allocate an extra £1,800 annually for a full-time worker.
National Insurance: Reduction in National Insurance contributions for Class 1 employees (under state pension age) from 12% to 10%.
Self-employed main rate cut to 8% from 9% starting April 6, 2024.
The lower earnings limit remains frozen at £6,396.
Implications for Business Owners: Immediate payroll changes are required by January 6, 2024.
Self-employed individuals stand to benefit, with an average annual increase of £350.
Capital Allowances: Full expensing for qualifying machinery and equipment made permanent, promoting tax relief.
No predefined list; eligibility depends on business nature.
Upcoming simplification efforts for capital allowances, focusing on extending relief to leased items.
Tax Changes for Small Businesses: Default cash-based accounting becomes the norm from April 6, 2024, simplifying income tax profit calculations.
Making Tax Digital (MTD) updates from April 2026, emphasizing the use of compliant software or accounting methods.
R&D Tax Relief: Merger of R&D Expenditure Credit (RDEC) and SME schemes.
Loss-making companies under the merged scheme are taxed at 19% (down from 25%).
The intensity threshold for the R&D intensives scheme was reduced to 30%, allowing more SMEs to qualify for enhanced relief.
A one-year grace period for businesses missing the new threshold, applicable from April 1, 2024.
These changes necessitate a thorough review of financial strategies, budgetary considerations, and operational processes. Please feel free to reach out for further clarification or assistance in navigating these adjustments.
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Business