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Is the Autumn Statement  putting the UK on the road to prosperity

Jeremy Hunt has made some changes

Now that the dust has settled on Jeremy Hunt’s Autumn Statement, with the headline grabber being the reduction in NIC for both the employed and self-employed, what else did the Chancellor announce? Pretty much zero as far as most workers are concerned, but there were a couple of gems regarding business and a key announcement on MTD,

Hunt’s message to businesses did little to excite the newspaper headline writers, but nonetheless, most business owners believe it was very good news. Not only did he double the length of time to claim full tax relief on investments in Freeports and Special Investment Zones to 10 years, but he also made full expensing a permanent measure.

(Full expensing means that companies can deduct 100% of the cost of capital investments, including new plant and machinery, and other qualifying items. These qualifying items encompass a range of assets, from industrial buildings and security systems to computers and office furniture)

Autumn Statement 2023: Game changer for business

The measures announced in relation to Freeports and Special Investment Zones is certain to have a positive effect on investment in such zones. However, the announcement of five additional investment zones for England and Wales, is a progressive measure and demonstrates a commitment to encouraging investment in specifically targeted geographic areas.

The real game changer in the statement was making full expensing permanent throughout the UK. Businesses can now put in place long-term strategic plans in the knowledge that they will obtain tax relief for incurring major levels of capital expenditure on such assets.

I agree with the Chancellor, when he said in his speech, that the various measures, taken together, give the UK one of the most attractive capital allowance regimes in the world. It remains to be seen if businesses proactively use the incentives now available to invest, grow and make the UK economy more productive.

Autumn Statement 2023: Changes to MTD

In his Autumn Statement, the Chancellor gave the welcome, but surprising news that Making Tax Digital for income tax self-assessment (MTD) will not be extended to those earning under £30,000 (Band A) for the indefinite future, as well as making a number of other positive tweaks to the rules.

He also indicated that the introduction of MTD for landlords and the self-employed would be staged for those in the £30,000 to £85000 band. Those with income over £50,000 will come in no earlier than 6th April 2026, and those with between £30,000 and £50,000 will come at least a year later with a hint that they may be including in Band A and exempted from the provision altogether.

Autumn Statement 2023: Historical perspective

Nearly ten years have passed since former Chancellor George Osbourne announced the ‘death of the tax return’. Since then, we’ve had numerous difficulties and delays, and MTD has still not yet been launched. The Autumn Statement announcements are however a step in the right direction.

In the coming days, we should see updated regulations published which will provide more detail.  In the meantime, however, April 2026 is looming ever larger in our rear-view mirrors for those who will be involved with MTD unless it is delayed yet again, which is likely if as expected, Labour wins the next election.

Autumn Statement 2023: Other measures

There were a handful of other announcements made by the Chancellor, namely:

  1. National living wage to be increased to £11.44 per hour
  2. Alcohol duty frozen until 1st August 2024
  3. State pension to be increased by 8.5%
  4. 75% business rate discount for retail, hospitality and leisure extended until 2025

Tax Accountant’s view

I must confess that I pretty much agreed with all the measures in Jeremy Hunt’s announcement, which is most definitely a first for me!