Chancellor Jeremy Hunt announced the 2023 Autumn Statement on 22 November. With the help of our tax experts we have summarised the key tax measures most relevant to our clients, and what they mean going forwards. We hope you find it useful and informative.
If you would like more information or would like to speak to one of our tax experts, please fill in the form below to get in contact.R&D Tax Reliefs A key business announcement has been the confirmation that the current R&D Expenditure Credit (RDEC) and SME schemes will be merged from April 2024 onwards, a clear initiative for innovation and growth. Other key announcements around R&D Tax reliefs are: The rate at which loss-making companies are taxed within the merged scheme will be reduced from 25% to 19%. The intensity threshold in the R&D intensives scheme will also be reduced from 40% to 30% for accounting periods that start on or after 1 April 2024, allowing around 5,000 extra SMEs to qualify for an enhanced rate of relief. A one-year grace period will also be introduced, providing certainty for companies who dip under the 30% threshold that they will continue to receive relief for one year. It will become mandatory, subject to limited exceptions, for companies to receive their R&D payments directly. HMRC will continue to scrutinise and police the R&D claim regime to ensure the reduction of high levels of fraudulent or other non-compliant claims. “The UK already has one of the most competitive business tax regimes among major economies, with the lowest headline rate of Corporation Tax and joint highest uncapped headline rate of R&D tax relief for large companies in the G7. This further establishes this. The changes made in the Autumn Statement were intended to simplify the system and provide greater support for UK companies to drive innovation. We know from talking to our clients, one concern we will need to manage is the increasing compliance burden that will incur additional costs.” Shenal Wijetunge, R&D Director, Signature Tax Innovations
- 100% First Year Allowance for new, main pool expenditure (Full Expensing)
- 50% First Year Allowance for special pool expenditure
- Class 2 NICs will be abolished from 6 April 2024. Normally paid weekly by self-employed individuals with profits in excess of £12,570, will save £192 per year.The weekly rate was due to rise to £3.70 from April, but those contributions will no longer be required to be paid.
- Class 4 NICs will be reduced from 9% to 8%, with effect from 6 April 2024 helping around 2 million self-employed people.
What didn’t they cover? There was much speculation about reductions in Inheritance Tax (IHT) and Stamp Duty Land Tax (SDLT), but they didn’t materialize. Nor was there any mention of any changes in the regime for non-domiciliaries, which Labour have said they will abolish if they form the next government. There was no increase in Fuel Duty, but neither was any cut nor a further freeze announced. “The Chancellor clearly had second thoughts on cutting IHT, presumably because “cutting tax for the rich” is hardly likely to be a vote winner. Opinions are divided on whether non-dom reform will actually benefit the country, and again the Chancellor has decided not to address this before the General Election. Whilst hard-pressed motorists will be grateful that there was no duty increase, they will at the same time be disappointed that there was no cut, in the midst of the cost of living crisis. Alan Milne, Senior Tax Manager, Signature Tax