We’ve cut taxes. We’ve halved inflation. We’ve increased pensions. We’ve raised the National Living Wage.
There’s a clear dividing line between us and Labour.
We want to cut taxes. Labour don’t.
We want to control spending. Labour don’t.
We want to get the long-term unemployed into work. Labour don’t.
We want to stop the boats. Labour don’t.
If there’s a policy you support, chances are Labour oppose it.
We’re the only ones backing the British people.
Full details of the Autumn Statement are:
the Chancellor of the Exchequer, Jeremy Hunt, delivered his Autumn Statement this afternoon. He outlined his plans to “unlock investment, reward work and grow our economy”. This includes growth measures to “back British business”, focusing on aspects such as apprenticeships, planning, foreign direct investment, pensions and innovation, as well as cutting business taxes.
The Government’s press release is here and the landing page for all Government documents can be found here, with tax documents here. The full Autumn Statement can be accessed here.
Summary of key announcements
Business and funds taxes
- Capital allowances: ‘Full expensing’ of expenditure on plant and machinery will become permanent - “the biggest business tax cut in modern British history”. Legislation in the Autumn Finance Bill will remove the current 2026 end date for full expensing. A technical consultation on wider changes to the capital allowances legislation has also been launched, with draft legislation to be released in Summer 2024. Click here for the technical consultation and the policy paper is here.
- R&D tax relief: The existing R&D expenditure credit and SME R&D scheme will be merged from April 2024. The threshold for additional support for R&D intensive loss-making SMEs will be lowered to 30% with effect from April 2024 to benefit more SMEs. Click here for the Government’s technical note on the measures and here for the policy paper on the measures confirmed.
- Creative industry reliefs: A call for evidence will be launched on tax relief for expenditure on visual effects in the film and TV industry from April 2025. In addition, it is confirmed that current reliefs will become above-the-line Audio-Visual Expenditure Credits, which will be available to claim from 1 January 2024. Click here.
- Multinational top-up tax: Further “minor” amendments will be made to the UK Pillar Two legislation. Click here. We are working through the changes to see which are new, and which we have already seen in the draft legislation released in July and September 2023. The legislation for the under-taxed profits rule or UTPR (published in draft in July) will not be in the Autumn Finance Bill.
- ORIP: The Government will introduce legislation to repeal the Offshore Receipts in respect of Intangible Property (ORIP) rules in 2024. The repeal will take effect for income arising from 31 December 2024 alongside the introduction of the Pillar 2 UTPR.
- REITs: Following the draft legislation issued in July 2023, the changes to the REIT tax regime will be made in the Autumn Finance Bill and will generally take effect from the date of Royal Assent (with some exceptions). A key new change is that the Holders of Excessive Rights rules (which can require holdings of 10% or more in a REIT to be fragmented) should not apply to investors whose tax charge under a treaty is not altered by the size of their holding in a UK REIT. Click here.
- Investment zones: As previously announced, the tax reliefs available to freeports and investment zones will be extended from 5 to 10 years. This includes 100% SDLT relief, an enhanced structures and buildings allowance at 10% per annum, an enhanced 100% first-year capital allowance, employer NIC relief, and 100% business rates relief. New zones were announced in the West Midlands, East Midlands and Greater Manchester, and a second zone in Wales.
- Energy profits (oil and gas) levy (EPL): A technical note has been published on the EPL Energy Security Investment Mechanism, setting out the technical detail and practical application of the mechanism. The legislation will not be in the next Finance Bill. Click here.
- Oil and gas fiscal review: The outcome of the Government’s review of the fiscal regime for the UK oil and gas industry has been released. The Government response includes comments on the predictability over the future tax treatment of price shocks and maintaining the existing set of investment incentives whilst also confirming the EPL will end no later than 31 March 2028 and highlighting continued engagement on suggestions for simplifying the tax regime. Click here.
- Decommissioning funds for Carbon Capture Usage and Storage (CCUS): Legislation will be introduced in a future Finance Bill to provide tax relief for payments by oil and gas companies into decommissioning funds where this relates to the repurposing of assets within the oil and gas corporation tax ring fence for use in CCUS activities. Additionally, legislation will remove corresponding asset value payments for those assets from the charge to the Energy Profits Levy.
- Electricity generator levy: A new exemption from the electricity generator levy for new renewable generation projects which create a new electricity generating station or expand an existing generating station where the substantive decision to proceed is made on or after 22 November 2023. New electricity generating projects will include new standalone stations, capacity increases and wholescale replacement of generating plant of existing stations. A technical note has been published. Click here.
- Pensions: Secondary legislation will be introduced to reduce the free-standing tax charge which applies to authorised surplus payments to sponsoring employers of a registered pension scheme from 35% to 25%. This measure will take effect from 6 April 2024.
- Expanding the cash basis for small businesses: This measure sets the cash basis as the default method of calculating trading profits for eligible businesses, with an opt-out for accruals. It also removes the entry and exit thresholds based on turnover, and removes restrictions specific to the cash basis on interest deductions and loss relief. Click here.
- FDI (foreign direct investment): The Government will accept all headline recommendations made by Lord Harrington in his report on FDI, including a concierge service for potential investors into the UK.
- Consultation on introducing a UK regime for captive insurance companies: The Government will consult on the design of a new framework for encouraging the establishment and growth of captive insurance companies in the UK. The consultation will launch in Spring 2024.
- Carbon Border Adjustment Mechanism: Note that we have not seen anything yet on a UK CBAM. The Autumn Statement document states: “The Government has undertaken extensive consultation on possible measures to mitigate carbon leakage risk including introducing a carbon border adjustment mechanism and will publish its response shortly.”
Personal and employment taxes
- National Insurance: Class 2 NICS for the self-employed will be abolished (while maintaining access to state pensions) and Class 4 NICs for the self-employed will reduce to 8% (from 9%) from April 2024. In addition, the main rate of employee NI will be reduced from 12% to 10% from 6 January 2024.
- NICS for veterans: The Government is extending the employer National Insurance contributions relief for employers hiring qualifying veterans for a further year from April 2024 until April 2025.
- Off-payroll working: HMRC will be able to reduce the PAYE liability of a deemed employer, where that engagement was incorrectly treated as self-employed for tax purposes. The changes will be in the next Finance Bill and take effect from 6 April 2024. Click here. The summary of responses to the consultation has also been published (here).
- Enterprise Investment Scheme and Venture Capital Trust Scheme: Extension of the operation of the EIS and VCT scheme from April 2025 to April 2035, continuing the availability of income and capital gains tax reliefs for investors in qualifying companies and VCTs. This will be in the Autumn Finance Bill. Click here.
- Abolition of lifetime allowance: A measure to complete the work of abolishing the lifetime allowance, including clarifying the tax treatment of pension savings. This will be in the Autumn Finance Bill and apply from 6 April 2024. Click here.
- Pensions: The pensions triple lock will be maintained, with an increase in the state pension of 8.5% from April 2024. The Government will also take forward other reforms, including allowing individuals to maintain one pension pot, by requiring employers to pay into existing pension funds.
- National Living Wage: As previously announced, the National Living Wage will increase to £11.44 from April 2024, and the National Minimum wage will also increase.
- Van Benefit Charge and Car & Van Fuel Benefit Charges: The Van Benefit Charge and the Car & Van Fuel Benefit Charges will be maintained at 2023-24 levels for 2024-25.
Stamp duty, VAT and other taxes and duties
- Stamp duty and SDRT: Widening the access to the growth market exemption for Stamp Duty and Stamp Duty Reserve Tax. The change will apply from 1 January 2024 and the legislation will be included in the Autumn Finance Bill. Click here.
- Stamp duty and SDRT: As announced on 14 September, legislation in Autumn Finance Bill 2023 will ensure that the existing 0% charges under Stamp Duty and SDRT on issues (and certain related transfers) of securities onto foreign markets, will remain in place and be brought permanently into UK law. This will apply from 1 January 2024 and the legislation will take effect immediately.
- Business rates: The small business multiplier for business rates will be frozen for another year, and the 75% discount for retail, hospitality and leisure will be extended by one year.
- Remote gambling: A consultation will be published on proposals to bring remote gambling into a single tax.
- VAT energy-savings materials relief: Expanding the VAT relief available to additional technologies, such as water-source heat pumps, and bringing buildings used solely for a relevant charitable purpose within scope. These reforms will be implemented from February 2024.
- Retained EU Law: As previously announced, the Autumn Finance Bill will include legislation to clarify how VAT and excise law should be interpreted in the light of the Retained EU Law (Revocation and Reform) Act 2023.
- VAT Retail Export Scheme: The Government will continue to accept representations and consider the next steps.
- VAT treatment of private hire vehicles : The Government will consult in early 2024 on the impact of the July 2023 High Court ruling in Uber Britannia Ltd v Sefton MBC.
- Other changes:
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- 0% rate of VAT on women's period products expanded to include period underwear.
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- Alcohol duty will be frozen until 1 August 2024.
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- Tobacco duty on hand-rolled tobacco will increase above inflation. Click here.
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- Road tax for HGVs and the rate of HGV levy will not increase. Click here.
Tax management and administration
- Making Tax Digital: Simplifications will be made to MTD for income tax self-assessment (MTD for ITSA), including removing the requirement to provide an End of Period Statement and exempting some taxpayers from MTD. The Government will keep under review the decision on further mandation of businesses and landlords with income below £30,000. Click here.
- MTD penalties: Taxpayers who volunteer to join MTD for ITSA from April 2024 will benefit from the new penalty reform measures, only applicable to annual submission obligations and late payment of tax. Click here.
- Construction industry scheme: The forthcoming Finance Bill will include changes to the CIS rules, coming into force from 6 April 2024, including adding compliance with VAT obligations to the Gross Payment Status test, expanding the grounds (including other taxes) for immediate cancellation of GPS. Click here.
- Promoters of tax avoidance: Autumn Finance Bill 2023 will introduce a criminal offence for promoters of tax avoidance who continue to promote avoidance schemes after receiving a Stop Notice and a new power enabling HMRC to bring disqualification action against directors of companies involved in promoting tax avoidance, including those who control or exercise influence over a company. Click here.
- The Chancellor also promised HMRC resource to collect “the tax that is due”.