Budget Updates

Stay up-to-date with our spring and autumn budget updates, where we’ll provide you with expert analysis and insights on what it all means for you and your finances.

Autumn Statement 2023

The Autumn Statement had initially been trailed as focusing on the longer term issues facing the country, but the Chancellor decided to prioritise short-term tax cuts over maintaining future expenditure. The most headline-grabbing immediate moves were cuts to national insurance and placing the expensing of corporate investment onto a permanent basis.

Some of the rumoured changes, such as inheritance tax reform, did not appear. But there is still a chance with the Spring Budget, due to take place in March next year.

Some of the key announcements included:

• A cut in the main rate of class 1 employee NICs from 12% to 10% taking effect from as soon as 6 January 2024. There will be a reduction in the main rate of class 4 self-employed NICs from 9% to 8% from 6 April 2024 when class 2 NICs will be abolished.
• Making permanent the full expensing of investments by companies in qualifying plant and machinery, so it will continue after April 2026.
• The continued freeze of the main income tax allowances and thresholds, the main national insurance contributions thresholds and the inheritance tax nil rate bands for 2024/25.
• A full triple lock increase of 8.5% for 2024/25 for state pensions and pension credit. But universal credit and most other benefits will increase by just 6.7% in line with CPI inflation to September 2023.
• Freedom for investors to make multiple subscriptions to ISAs of the same type each year from April 2024. Partial transfers of ISAs between providers will also be permitted.
• A 9.8% increase in the national living wage to £11.44 an hour.

Spring Budget 2023

Chancellor Jeremy Hunt presented the Spring Budget, with a focus on stimulating the economy while balancing economic and political concern. Some tax rate changes were announced by the Chancellor. However, he had to ensure a balance between longer-term economic goals and current concerns about inflation and cost of living.

Some important tax changes to keep in consideration for 2023/24 are:

• Most main tax allowances and reliefs remain unchanged. However, the threshold for additional rate taxpayers is reduced to £125,140.
• Annual allowance for pensions will increase by 50% to £60,000. Plus, the money purchase annual allowance will rise from £4,000 to £10,000.
• The capital gains tax exempt amount is reduced from £12,300 to £6,000 for 2023/24.
• The corporation tax increase announced by Rishi Sunak when he served as the Chancellor pushes the rate to 25%.
• The pensions lifetime allowance is set to be abolished from April 2024, after the lifetime allowance charge is removed from April 2023.
• The dividend allowance is cut from £2,000 to £1,000 for 2023/24.
• Companies investing in new plant and machinery in the three years from 1 April 2023 can claim a first-year allowance of up to 100% of expenditure.
• For Scottish taxpayers, the higher and top rates of tax increase by 1% to 42% and 47%, respectively.