Chancellor Jeremy Hunt has delivered his Autumn Budget to parliament. Find out what the announcement means for UK businesses.
On 22nd November, Hunt unveiled a series of measures to boost the economy and help businesses.
Headline announcements include:
Be sure to let us know what you think of the budget and how it will affect your business.
“This change will help 27 million people. It means someone on the average salary of £35,000 will save over £450,” he said.
In a boost to self-employed people, the chancellor promised to abolish Class 2 National Insurance, equating to a £192 yearly saving. Class 4 National Insurance contributions charged on all profits between £12,570 and £50,270 will be cut from 9% to 8%.
Hunt added that he will freeze the small business multiplier for a further year.
Hunt told parliament that the move will increase annual investment by around £3 billion a year and said it was “the biggest ever boost for business investment in modern times”.
Hunt told parliament that he will launch a “new simplified R&D tax relief”, combining the existing R&D Expenditure Credit and SME schemes. He said he would also reduce the rate at which loss-making companies are taxed within the merged scheme from 25% to 19%.
This includes:
“Taken together across our fastest-growing innovation sectors, this support alone will attract an estimated £2 billion of additional investment every year over the next decade,” he said.
If you’re considering taking on an apprentice, check out our guide three reasons to hire an apprentice as a small business owner.
In a move to boost innovation in the creative industries, Hunt said he will “launch a call for evidence” on how to increase the film and high-end TV tax credits.
The Chancellor said the government will create three further Investment Zones focused on advanced manufacturing in the West Midlands, East Midlands and Greater Manchester, as well as a second Investment Zone in Wales.
“Together, local partners expect these will help catalyse over £3.4 billion of private investment and 65,000 new jobs,” he said.
If you’re looking for advice on how to manage your pension as a small business owner, take a look at our expert guide.
Hunt said that by 2030, the majority of workplace Defined Contribution (DC) savers will have their pension pots managed in schemes of more than £30 billion and by 2040, all local government pension funds will be invested in pools of £200 billion or more.
He will also consult on giving savers a legal right to require a new employer to pay pension contributions into their existing pension pot if they choose, which would mean people can move to having one pension pot for life.
Hunt said the government will allocate £450 million to the Local Authority Housing Fund to deliver 2,400 new homes and will consult on a new Permitted Development Right to allow any house to be converted into two flats, provided the exterior remains unaffected.
“So, from next year, working with the Communities Secretary, I will reform the system to allow local authorities to recover the full costs of major business planning applications in return for being required to meet guaranteed faster timelines. If they fail, fees will be refunded automatically with the application being processed free of charge.”
“After talking to businesses such as National Grid, Octopus Energy and SSE, we today publish our full response to the Winser review and Connections Action Plan. These measures will cut grid access delays by 90% and offer up to £10,000 off electricity bills over 10 years for those living closest to new transmission infrastructure,” Hunt said.
Taken together, these planning and grid reforms are estimated to accelerate around £90 billion of additional business investment over the next 10 years.
In tough economic times, it’s more important than ever to ensure your business is financially sound. Luckily, we have plenty of expert advice on UKBF! Why not check out these practical guides?
How to help your small business survive an economic recession
Nine business cost of living tips and hacks
The move was part of “further capital market reforms to boost the attractiveness of our markets”, and make the UK one of the most “attractive places to start, grow and list a company".
“It’s time to get Sid investing again,” he said.
Will the Autumn Budget help or hinder your business? Share your thoughts and let us know!
On 22nd November, Hunt unveiled a series of measures to boost the economy and help businesses.
Headline announcements include:
- National Insurance will be cut from 12% to 10%
- National Living Wage for over-21s to increase from £10.42 to £11.44 an hour
- 75% business rates discount has been extended
- State pension to rise by 8.5%
- Plant and machinery tax break made permanent
- Benefits to rise in line with inflation
- Alcohol duty frozen until next year
Be sure to let us know what you think of the budget and how it will affect your business.
State of the economy
Before getting to the announcements, here are the key predictions from the Office for Budget Responsibility (OBR):- Headline inflation will be 2.8% by the end of 2024, falling to 2% in 2025
- The economy will grow by 0.6% this year and 0.7% next year
- Debt will be 91.6% of gross domestic product (GDP) next year, 92.7% in 2024-25, 93.2% in 2026-27, and 92.8% in 2028-29
National Insurance cut
The chancellor will cut the main rate of Employee National Insurance from 12% to 10%, starting from 6th January 2024.“This change will help 27 million people. It means someone on the average salary of £35,000 will save over £450,” he said.
In a boost to self-employed people, the chancellor promised to abolish Class 2 National Insurance, equating to a £192 yearly saving. Class 4 National Insurance contributions charged on all profits between £12,570 and £50,270 will be cut from 9% to 8%.
National Living Wage increased
Hunt said he will increase the National Living Wage by 9.8% from £10.42 to £11.44 an hour for over-21s. This is worth up to £1,800 for a full-time worker, he said.Business rates discount extended
The chancellor promised to extend the 75% business rates discount for retail, hospitality and leisure businesses for another year, worth £4.3 billion. This will save the average independent pub over £12,800 next year, he said.Hunt added that he will freeze the small business multiplier for a further year.
Plant and machinery ‘full expensing’ made permanent
A tax break allowing companies to reduce their tax by up to 25p for every £1 they spend on plant and machinery has been made permanent, the Chancellor said. The deduction had been due to end in April 2026.Hunt told parliament that the move will increase annual investment by around £3 billion a year and said it was “the biggest ever boost for business investment in modern times”.
Threshold to be considered R&D intensive cut
The Chancellor has confirmed the threshold for businesses to be considered R&D intensive will be reduced from 40% to 30% of total expenditure.Hunt told parliament that he will launch a “new simplified R&D tax relief”, combining the existing R&D Expenditure Credit and SME schemes. He said he would also reduce the rate at which loss-making companies are taxed within the merged scheme from 25% to 19%.
Boost for advanced manufacturing and green energy sectors
Hunt said the government will invest £4.5 billion over the five years to 2030 to attract investment into strategic manufacturing sectors, such as advanced manufacturing and green energy.This includes:
- £2 billion for zero-emission investments in the automotive sector
- £975 million for aerospace
- £520 million for life science companies
“Taken together across our fastest-growing innovation sectors, this support alone will attract an estimated £2 billion of additional investment every year over the next decade,” he said.
Funding for apprenticeships
Hunt announced funding of £50 million over the next two years to pilot ways to increase the number of apprentices in engineering and other key growth sectors.If you’re considering taking on an apprentice, check out our guide three reasons to hire an apprentice as a small business owner.
Investment in AI innovation centres
Hunt announced a £500 million investment over the next two years to fund more innovation centres. The move would be “building on the success of the supercomputing centres in Edinburgh and Bristol”.In a move to boost innovation in the creative industries, Hunt said he will “launch a call for evidence” on how to increase the film and high-end TV tax credits.
Boost for investment zones
Financial incentives for Investment Zones and tax reliefs for Freeports will be extended from five years to 10 years, the Chancellor said. He also announced plans to launch a new £150 million Investment Opportunity Fund to “catalyse investment into the programme”.The Chancellor said the government will create three further Investment Zones focused on advanced manufacturing in the West Midlands, East Midlands and Greater Manchester, as well as a second Investment Zone in Wales.
“Together, local partners expect these will help catalyse over £3.4 billion of private investment and 65,000 new jobs,” he said.
Move to tackle late payment
The chancellor said that from April 2024, any company bidding for large government contracts should demonstrate they pay their own invoices within an average of 55 days, which will reduce progressively to 30 days.Pensions increase
The chancellor told parliament that the state pension will rise by 8.5% from April 2024. This equates to £221.20 a week, worth up to £900 more a year.If you’re looking for advice on how to manage your pension as a small business owner, take a look at our expert guide.
Pension fund reforms to finance high-growth companies
The chancellor announced pension fund reforms which he said could unlock an extra £75 billion of financing for high-growth companies by 2030 – and provide an extra £1,000 a year in retirement for an average earner saving from 18.Hunt said that by 2030, the majority of workplace Defined Contribution (DC) savers will have their pension pots managed in schemes of more than £30 billion and by 2040, all local government pension funds will be invested in pools of £200 billion or more.
He will also consult on giving savers a legal right to require a new employer to pay pension contributions into their existing pension pot if they choose, which would mean people can move to having one pension pot for life.
Planning reforms
The chancellor promised to invest £110 million over the next two years to deliver high-quality nutrient mitigation schemes, which allow developers to offset nutrient pollution from housing development by buying credits under Natural England. He said the move should unlock an additional 40,000 homes.Hunt said the government will allocate £450 million to the Local Authority Housing Fund to deliver 2,400 new homes and will consult on a new Permitted Development Right to allow any house to be converted into two flats, provided the exterior remains unaffected.
‘It takes too long to approve infrastructure projects’
Hunt told parliament that it “takes too long to approve infrastructure projects and business planning applications”. He said that many businesses would be willing to pay more if they knew their application would be approved faster.“So, from next year, working with the Communities Secretary, I will reform the system to allow local authorities to recover the full costs of major business planning applications in return for being required to meet guaranteed faster timelines. If they fail, fees will be refunded automatically with the application being processed free of charge.”
Energy bill reductions
The chancellor told parliament that it is taking “too long” for clean energy businesses to access the electricity grid.“After talking to businesses such as National Grid, Octopus Energy and SSE, we today publish our full response to the Winser review and Connections Action Plan. These measures will cut grid access delays by 90% and offer up to £10,000 off electricity bills over 10 years for those living closest to new transmission infrastructure,” Hunt said.
Taken together, these planning and grid reforms are estimated to accelerate around £90 billion of additional business investment over the next 10 years.
In tough economic times, it’s more important than ever to ensure your business is financially sound. Luckily, we have plenty of expert advice on UKBF! Why not check out these practical guides?
How to help your small business survive an economic recession
Nine business cost of living tips and hacks
Sale of NatWest shares
Hunt said the government will “explore options” regarding the sale of NatWest shares over the next 12 months, subject to market conditions. The government currently owns a 38.7% stake in NatWest.The move was part of “further capital market reforms to boost the attractiveness of our markets”, and make the UK one of the most “attractive places to start, grow and list a company".
“It’s time to get Sid investing again,” he said.
New devolution deals
Hunt said the government is publishing new devolution deals with four areas including Hull and East Yorkshire and offering devolved powers to even more county areas.Foreign direct investment
Hunt said he accepted the headline recommendations from Lord Harrington’s report on how to increase foreign direct investment. He said the government would put in place a concierge service for large international investors “modelled on the best such services offered by our competitors” and will increase funding for the Office for Investment to deliver it.Will the Autumn Budget help or hinder your business? Share your thoughts and let us know!
