The Chancellor used his 2023 Autumn Statement to “make work pay” and “go for growth”. Whilst widely rumoured, there were no changes to Income Tax thresholds or Inheritance Tax changes. However, following a gloomy political and economic backdrop there have been some welcome changes announced, many of which could affect our clients.
You can read our full guide to the Autumn Statement for further details, however, we would like to draw attention to the following points to note:
State Pension Triple Lock Retained
The State Pension will rise by 8.5% in April 2024, keeping to the triple lock promise. This will bring payments up to £221 a week, which is a £900 per annum increase for our clients who receive the full new State Pension.
National Insurance Rate Reduced
The headline rate for employees has been cut from 12% to 10% from 6th January 2024. Therefore, those with earnings between £12,570 per annum and £50,270 per annum will see a National Insurance rate reduction of 2%. For someone earning £45,000 a year, that’s a saving of nearly £650 per annum.
Further savings were also announced for the self-employed. Class 2 flat rate national insurance contributions will be abolished, saving of £170 per annum. Finally, Class 4 rates will fall from 9% to 8% in April 2024.
Individual Savings Accounts (ISA) Changes
Whilst not featured in the speech, the Autumn Statement 2023 includes changes to the ability to make multiple ISA subscriptions in one year and make partial transfers.
Furthermore, the age threshold for Cash ISAs will increase to age 18 in April 2024. Therefore, if you have children or grandchildren between the ages of 16 and 18 you may wish to consider topping this up before April 2024.
All ISA allowances have been frozen.
National living wage increase
For those over 21, the minimum wage will increase from £10.42 to £11.44 per hour in April 2024. This is a bigger rise than that given to the State Pension and benefit rises, perhaps part of the conservative brief to “make work pay” more.
Plant and machinery tax break to stay
Full expensing will remain permanent. This allows businesses to offset investment in items such as new IT equipment and factory machinery against taxable profits.
Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) reliefs to stay
The EIS and VCT reliefs were due to expire after 5 April 2025, however, new legislation will be introduced to expand the lifetime of these reliefs to 2035.
Should you have any questions regarding items raised in the Autumn Statement, please do not hesitate to get in touch with your MacDonald Partnership Independent Financial Adviser.
Author: MacDonald Partnership
Published: 23rd Nov 2023
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