Summary of the Government’s Autumn Statement

The Government’s Autumn Statement on 22 November 2023 included a number of measures affecting small businesses and the self-employed. Here is a round-up of the key points you need to know:

• National Insurance Contributions (NICs) for employees will be cut by 2p, from 12% to 10%, from 6 January 2024, and Class IV NICs for the self-employed are to fall from 9% to 8% from 6 April 2024. Class II NICs for the self-employed will reduced to zero and then abolished from 6 April 2024. This is UK-wide. The announcements on NI reductions are welcome news for individuals, but still don’t help small businesses with the ever-growing tax-burden.
• The small business multiplier for business rates in England will be frozen for next year’s bills, removing the scheduled CPI inflation increase, and the 75% discount for retail, leisure and hospitality SMEs in England has been extended until March 2025, after it had been due to run out in March 2024.
• New measures to tackle late payments. From April next year, companies with a turnover of £5 million or more will be banned from bidding for public contracts if they have a record of paying their suppliers after 55 days or more. After a year, this will decrease to banning those who pay over 45 days, reducing to 30 days the year after, in line with the Prompt Payment Code. This is a UK-wide measure.
• HMRC to rewrite guidance around the tax deductibility of training costs for sole traders and the self-employed. This will provide more clarity to business on what costs are deductible and ensure that sole traders and the self-employed can be confident that updating existing skills or maintaining pace with technological advances or changes in industry practices, are allowable costs for tax purposes.
• The income tax cash basis for the self-employed and partnerships is being expanded and simplified from 6 April 2024. Currently, only those with turnover under £150,000 may calculate profits based on when they get income or make payments, known as the cash basis. The new measures will remove the £150,000 threshold, with an option to choose the accruals basis, which records revenues and expenses before payments are received or issued, if preferred.
• The Making Tax Digital for Income Tax Self-Assessment threshold will be maintained at £30,000, and changes will be made to simplify and improve the system from April 2026.
• Alcohol duty has been frozen until 1 August 2024.
• The two current R&D tax relief schemes have been merged, and a new scheme for R&D-intensive firms has been created. These schemes will be implemented from April 2024. For small businesses to qualify for the R&D intensive scheme, 30% of their total expenditure will need to be spent on R&D; this was previously set at 40%.
• The Employers National Insurance holiday for small employers who take on veterans, will be extended by a year.
• Full expensing, which grants businesses 100% capital allowances on qualifying new plant and machinery investments, will be made permanent from March 2026. Most small businesses, however, are already covered by the Annual Investment Allowance set at £1m.
• New Investment Zones have been announced in Greater Manchester, the West Midlands, the East Midlands, and Wrexham and Flintshire. The financial incentives for Investment Zones and tax reliefs for Freeports have been extended from five to ten years.
• Extension of the Growth Duty to Ofcom, Ofgem, and Ofwat, meaning that these important regulators will be required to have regard for economic growth and ensure that regulatory action is only taken when needed, and that it is proportionate to those that they regulate, including SMEs.
• £50 million will be spent on a two-year apprenticeships pilot in England, to look at how starts can be encouraged in growth sectors, and to address barriers to entry in high-value apprenticeships.
• Legislation will be introduced next year to encourage the uptake of Open Banking-enabled payments.
• The National Living Wage will increase. From 1 April 2024, the National Living Wage (NLW) will increase by 9.8% to £11.44, with the age threshold lowered from 23 to 21 years old.  
  • 21 and over, £11.44, up by £1.02, 9.8% 
  • 18-20 year old rate, £8.60, up by £1.11, 14.8% 
  • 16-17 year old rate, £6.40, up by £1.12, 21.2% 
  • Apprentice rate, £6.40, up by £1.12, 21.2% 
  • Accommodation offset, £9.99, up by £0.89, 9.8%