Chancellor of the Exchequer Jeremy Hunt will deliver his Autumn Statement on 22 November 2023, where he will provide information on the UK government’s plans for taxation and public spending.
It will be the Chancellor’s penultimate statement ahead of the Spring Budget next year and a general election.
There are unlikely to be any significant announcements in comparison to the Spring Budget 2023 which focussed on policies directed at getting people into work and keeping them there.
Here’s what we could expect from the Autumn Statement.
Tax cuts ‘virtually impossible’
The Chancellor is under pressure to cut taxes following a series of threshold freezes and reduction of allowances which came into force in April, but the chances of that happening appear slim.
In a radio interview Mr Hunt has said that tax cuts will be ‘virtually impossible’ until the country’s high levels of debt are brought down and the economy is under control, and he reiterated that the government’s priority is to fulfil on its promise to halve inflation by the end of the year.
This pledge was made by Rishi Sunak in January when inflation was at 10.1% – It currently stands at 6.7%.
Inheritance tax (IHT)
In spite of the Chancellor saying that tax cuts are ‘virtually impossible’, The Sunday Times recently reported that some government ministers are discussing the possibility of making changes to IHT and even abolishing it.
Currently, IHT is charged at 40% on anything above the tax-free threshold of £325,000.
However, this has been ruled out by both the main political parties ahead of next year’s general election.
Rise in the living wage
The National Living Wage for workers over 23 will rise from £10.42 an hour to at least £11 an hour, according to a speech given by Mr Hunt at the Conservative Party conference on 2 October.
Business rates reform
There is some speculation that Government might announce an extension to business rates relief beyond next spring. For 2023/24 there is a 75% business rates relief for eligible retail, hospitality, and leisure businesses of up to £110,000 per business.
With this relief due to come to an end in April 2024, some industry commentators are saying something needs to be done to help affected businesses.
Triple-Lock pension
There are rumours that the Treasury is considering plans to amend the ‘triple lock’.
The triple-lock dates back to 2010 and guarantees pensions will be boosted by either September’s inflation, earnings growth (from the period between May to July) or 2.5% – whichever is highest.
Any tweak to the triple lock rule would be controversial though as the Conservatives pledged in their last election manifesto not to make any changes.
Other possible announcements might include:
- Detailed rules for the single R&D tax relief scheme to start in April 2024
- Removal of double taxation under the IR35 off-payroll rules
- Changes to NIC rates from April 2024
- Potential changes to Individual Savings Accounts (ISAs)
Looking further ahead – what do we currently know about the Labour Party proposals?
Should Labour take control at next year’s general election, Shadow Chancellor, Rachel Reeves, has proposed some reforms which include:
- Closing IHT exemptions for agricultural land
- Stopping business relief which exempts shares in an unlisted company or a significant interest in a business
- Scrapping or reducing business asset disposal relief, which allows people who own more than 5% of a company to sell their stake and pay a lower capital gains tax rate
Considerations
We will be keeping a close eye on developments and bringing you all the major announcements on 22 November for the Autumn Statement along with our insights and the implications. If you have any queries in the meantime, please don’t hesitate to get in touch.
Disclaimer
The information was correct at time of publishing but may now be out of date.
