On 22 November 2023, at 12.30pm, Chancellor Jeremy Hunt is scheduled to deliver the 2023 Autumn Statement in the House of Commons. This yearly declaration offers insights into the Government’s economic plans, drawing from the latest findings of the Office for Budget Responsibility (OBR).
Here’s a rundown of the expected announcements and speculations:
1. Tax Cuts Unlikely The UK’s economic instability, high inflation, interest rates, and the ongoing cost-of-living crisis make the prospect of tax cuts seem unlikely, according to Hunt. He mentioned the challenges whilst in conversation with Andrew Marr on LBC, emphasising the importance of tackling inflation and interest rates to manage long-term debt costs.
2. Potential Changes to Inheritance Tax? While widespread tax reductions appear unlikely, rumours are circulating about potential modifications to Inheritance Tax. As of now, estates valued above the tax-free limit of £325,000 are taxed at 40%. However, there’s talk that this rate might be reduced or even phased out in the future.
3. Enhancement to the National Living Wage: By April 2024, the government is planning to elevate the National Living Wage (NLW) to at least £11 an hour, marking an appreciable rise from the existing £10.42. This adjustment would translate to an annual increment of more than £1,000 for those earning full-time on the NLW. Companies that don’t comply with these stipulated rates might be subjected to hefty penalties.
4. Worries Over Business Rates: UK Hospitality has voiced concerns over the anticipated increase in business rates set for April 2024. The industry fears that this could impose extra financial strain on them. There are appeals to retain the existing relief rates and prevent hikes tied to inflation.
5. There’s a possibility that the government might prolong the Enterprise Investment Scheme and Venture Capital Trust, currently slated to end on 6 April 2025. Such an extension could be advantageous for both individual businesses and the broader economy.
6. Jeremy Hunt is contemplating major revisions to ISAs, targeting an increase in the number of individuals investing in tax-free avenues, especially those keen on London-listed companies.
7. Debate on Pensions Triple Lock: The stability of the pensions triple lock mechanism, which assures yearly State Pensions raises based on either earnings growth, CPI inflation, or a minimum of 2.5%, is still in question. Despite the government’s professed allegiance to the triple lock, its actual implementation for the upcoming year, possibly at an 8.5% increase, is still up in the air.