It’s that time of the year again. Yesterday, the Chancellor, Jeremy Hunt, presented his statement for the Autumn Budget with the aim to grow the UK economy. Let’s have a look at the measures taken from a business and financial point a view.
About Economy and Taxes…
In terms of the economy, the OBR (Office for Budget Responsibility) predicts an average inflation rate of 2.8% by the end of next year and 2% by 2025. The public body sees an overall UK growth in 2023 of 0.6%. And an economic growth of 0.7% is expected in 2024, doubling to 1.4% in 2025.
The minimum wage, referred by the government as the national living wage, will rise to £11.44 per hour from April. That’s an increase of £1.02 from the current rate of £10.42.
Jeremy Hunt announced a cut to employee National Insurance from 12% to 10%, impacting 27 million workers. The Chancellor is abolishing Class 2 national insurance, which he says saves £192 a year, for the self-employed. During the statement, he said that he is making reforms to the way national insurance is paid to save around 2 million people an average of £350 per year.
Business Growth
During the last Spring Budget, the Chancellor announced measures allowing businesses to write off the full cost of qualifying plant and machinery investment. The government is now making this change permanent. A further £500m will be invested over the next two years to fund further “innovation centres to help make us an AI powerhouse”, Jeremy Hunt said during the Statement.
The government is announcing a business rates support package worth £4.3 billion over the next five years to support small businesses. A “new, simplified” tax relief for research and development will combine the existing R&D Expenditure Credit and SME schemes. Through that merged scheme, Jeremy Hunt said he will also cut the rate at which loss-making companies are taxed from 25% to 19%.
The intention of the government is to back the growth sectors of the future and is announcing further targeted support for digital technology, green industries, life sciences, advanced manufacturing and creative industries.
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