Autumn Budget 2023 Summary
Personal Tax
- Class 1 National Insurance applying to employees, cut from 12% to 10% from 6th January 2024. This would save someone on an average salary of £35,000 about £450 a year.
- Class 2 National Insurance which is paid by self-employed people earning more than £12,570 - abolished from 6th April 2024. This would save around £170 per year in NI. However, for self-employed individuals whose profits are below £6,725, there will still be a contribution to be made if they want credit toward state pension. This is similar to now where a voluntary contribution is required however the cost of which going forward is currently unknown.
- Class 4 National Insurance for self-employed - paid on profits between £12,570 and £50,270 - cut from 9% to 8% from 6th April 2024. The tax cut will be worth an average of £350 for a self-employed person earning £28,200 a year.
Wages
- National Living Wage to increase by £1.02 (9.8%) from £10.42 to £11.44 an hour from April 2023.
- New rate to apply to 21 and 22-year-old workers for the first time, rather than just those 23 and over
- The national minimum wage for 18 to 20-year-olds will also increase by £1.11 to £8.60 per hour.
- Apprentices will have their minimum hourly rates boosted going from £5.28 to £6.40 an hour.
Business
- "Full expensing" tax break which allows companies to deduct 100% of spending on new machinery and equipment from profits made permanent
- The 75% business rates discount for retail, hospitality and leisure firms in England extended for another year.
- All alcohol duty frozen until 1st August 2024
- Duty rate on tobacco products increases by 2% above RPI inflation; hand-rolling tobacco rises 12% above RPI.
- Fuel duty remains at 52.95p per litre for petrol and diesel.
Pensions & Benefits
- State pension payments to increase by 8.5% from April 2024, in line with average earnings.
- Universal credit and other working-age benefits in England and Wales to increase by 6.7% from April, in line with September's inflation rate
- Local Housing Allowance rates - which determine level of housing benefit and universal credit people receive to pay rent in Great Britain - to be unfrozen and increased to 30% of local rents from April.
- Claimants in England and Wales deemed able to work who refuse to seek employment to lose access to their benefits and extras like free prescriptions.
- Consultation on whether savers get the right to pick the pension scheme their employer pays into - possibly allowing them to have one pension pot for life. This could be a real administrative nightmare for employers if it eventually means having to report to and pay multiple pension providers for different employees.
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