The Chancellor Jeremy Hunt took to his feet in parliament, promising a pro-growth Autumn Statement with a focus on supporting business. One of his key headline measures was a cut in the main 12 % rate of employee National Insurance rate by 2 percentage points to 10 %, which will affect around 27 million people, being brought in from January 6th. There was also support for the self-employed with Class 2 National Insurance, paid by self-employed people earning more than £12,570, will be abolished from April.
Class 4 National Insurance for self-employed – paid on profits between £12,750 and £50,270 – will be cut from 9 % to 8 % from April. There was good news for pensioners, with the state pension increasing by 8.5 % from April 2024 to £220.20 per week, honouring the pensions triple-lock. The Chancellor also gave a permanent tax break for big businesses that allows them to save on corporation tax by offsetting most business spending from machinery to IT equipment and building works.
Small businesses may not experience such a boost, with them facing an increase in the national living wage from £10.42 an hour to £11.44 from April. This will apply to over 21s for the first time. But there was relief on business rates – the 75% business rates relief for hospitality, retail and leisure businesses up to a cap of £110,000 has been extended until 2025. The Chancellor said it will save the average independent pub £12,800 in 2024.
The small business rates multiplier will be frozen at 49.9p – the government says this will help around 90% of ratepayers.
Universal Credit and disability benefits will increase by 6.7%, in line with September’s inflation rate. And in his bid to boost the number of people in work the Chancellor announced mandatory work placements for the long-term unemployed.
The Chancellor hailed this statement as the biggest tax cut in history. However, the Shadow Chancellor Rachel Reeves said growth has hit a dead end. Overall, it’s still an environment of rising taxes and hard to see how we will see significant tax cuts in the near future. We have heard lots about tax cuts and the need to reward hard work It will still be a tax-raising parliament.