Autumn Statement 2023: At a glance

Chancellor Jeremy Hunt delivered the Autumn Statement on 22 November 2023. The key new tax announcements are summarised below.

Individuals

• The main rate of Class 1 employee National Insurance will be reduced from 12% to 10% from 6 January 2024
• Class 2 self-employed National Insurance will be abolished from 6 April 2024. Those affected will continue to receive access to contributory benefits such as the State Pension
• The main rate of Class 4 self-employed National Insurance will be reduced from 9% to 8% from 6 April 2024
• From 6 April 2024, HM Revenue & Customs (HMRC) will account for tax and National Insurance contributions already paid when calculating a deemed employer’s PAYE liability under the off-payroll working rules
• Changes will be made to simplify ISAs and widen the scope of investments that can be included in them from 6 April 2024
• Individuals who are income taxed only through Pay As You Earn (PAYE) and nothing else to report will not be required to file a Self Assessment tax return for 2024-25 onwards
• HMRC will clarify guidance for the self-employed on what training costs can be deductible for tax purposes
• From the 2024-25 tax year the cash basis will become the default method of calculating trading profits, with the existing turnover thresholds, the restriction on interest costs and the restriction on sideways loss relief removed
• Making Tax Digital for income tax (MTD ITSA) – quarterly reporting will go ahead for taxpayers with business or property income over £50,000 from April 2026
  • Those with income over £30,000 will enter the regime from April 2027
  • Taxpayers with income under £30,000 will be kept under review – so ultimately may still be brought into the regime
  • Taxpayers with no UK National Insurance number will be exempted from the MTD ITSA requirements
  • Administrative easements will be introduced to reduce the reporting required where properties are held in joint ownership.

Businesses

• The R&D expenditure credit (RDEC) and the small or medium enterprise (R&D SME) tax relief schemes will be merged into a single scheme for accounting periods starting from 1 April 2024
• ‘Full expensing’ of capital expenditure for companies investing in qualifying plant and machinery is being made permanent, including the 50% allowance for qualifying special rate assets
• A consultation will be launched on wider changes to the capital allowance rules as part of simplifying the tax system, with draft legislation expected in Summer 2024
• The Investment Zones programme announced at Spring Budget 2023 is being extended from five to 10 years and four new Investment Zones will be created
• The duration of tax reliefs for Freeports is being extended from five to 10 years
• Changes will be made to the construction industry scheme from 6 April 2024 to enable gross payment status to be removed from those with VAT compliance failures
• The government will consult on changes to increase relief available for visual effects expenditure, within the framework of the Audio-Visual Expenditure Credit
• As part of the wider reform of the creative sector tax reliefs, the government has announced some further changes. Specifically, intra-group charges will only be granted relief up to the arm’s length price, a formal definition of “documentary” will be introduced, and also payments will not be made to companies in liquidation or administration. Changes will also be introduced to require the submission of an online form to accompany claims to all creative sector reliefs, and to clarify aspects of the rules relating to the cultural tax reliefs (Theatre Tax Relief, Orchestra Tax Relief and Museums and Galleries Exhibition Tax Relief)
• The existing sunset clauses for the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) scheme will be extended from 6 April 2025 to 6 April 2035
• Changes will be made to the rules for Real Estate Investment Trusts (REITs) to remove some current constraints within the legislation and enhance the overall competitiveness of the regime
• The Undertaxed Profits Rule (part of the BEPS Pillar 2 global minimum tax framework) will be introduced for accounting periods beginning on or after 31 December 2024.