Autumn Budget 2023 Summary

Chris Broome – Chartered Financial Planner

Budget

Wages and benefits

  • Hunt says he is making the biggest set of welfare reforms in a decade and will get 200,000 more people into work.

  • People claiming benefits will face mandatory work experience if they do not find a job within 18 months.

  • As pre-announced, the national living wage will increase by more than a pound an hour from April to £11.44. It will also be extended to 21-year-olds.

  • Benefits will be increased by 6.7%, and there will be tougher requirements for those who claim them to look for work.

  • The state pension will be increased by 8.5%.

  • Hunt says he will increase the local housing allowance, which has been frozen since 2020, in a measure worth £800 for some households next year.

  • For the self-employed, the chancellor said he is making reforms to the way national insurance is paid to save around 2 million people an average of £350 per year. Meanwhile, Class 4 national insurance will be cut from 9% to 8% on earnings between £12,570 and £50,270.

Personal tax

  • Hunt says he will cut the main 12% rate of employee national insurance contributions by two percentage points to 10%.

  • This tax cut will be brought in from 6 January 2024, the chancellor says.

  • He says this will affect 28 million people, saving someone on the average salary £450.

Business tax

  • Hunt will make so-called “full expensing” permanent. This allows businesses to offset investment in items such as new IT equipment and factory machinery against tax.

  • The chancellor adds that the total package of measures will help boost business investment by about 1% of GDP.

  • Hunt says he wants to reform taxes paid by self-employed people, and will abolish their “class 2” national insurance contributions, which count towards their state pension entitlements. This will cut taxes for 2 million people, he says. “Class 4” contributions will be cut by one percentage point. Together these will be worth £350 a year.

  • There will be a business rates discount for hospitality retail and leisure worth £4.3bn.

Workplace Pensions

A pension pot for life scheme will be rolled out, giving workers the option to nominate the fund their employer pays into, which can follow them as they move throughout their working life.

Pension Lifetime Allowance

Please read –

Inheritance tax

No change.

Questions?

Please get in touch if you have any questions about what the Budget means for you or your financial plans.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.