THE AUTUMN STATEMENT – WHAT DO YOU THINK?

The Chancellor Jeremy Hunt delivered his Autumn Statement to the House of Commons yesterday in a bid to boost confidence in the Government and the economy as we head into an election year.

Headlines included a reduction in National Insurance contributions, freezing of duty on alcohol for longer and a commitment to keep the pension triple lock and also ensure that pensions and Universal Credit rises with inflation.

However the Office of Budget Responsibility has dampened its growth forecasts, there was little support for smaller businesses – with R&D largely being relevant to larger businesses and those in manufacturing and technology. Overall the view seems to be that not much has changed.

This all comes just before a new energy price cap is announced and it’s estimated that our energy bills will rise by around five per cent early next year. For many any saving in National Insurance may be used up in keeping the lights on. 

With 110 measures designed to boost the economy, we’ve asked business owners to  tell us what they thought for themselves, their clients and in general. 
 

Martin Gurney is the tax partner at Haines Watts Swindon which has been supporting businesses in the area for more than 30 years. For more information visit https://www.hwca.com/accountants-swindon/

I always struggle when I am asked for Budget predictions.  This year I plumped for “it will be beige” – I wasn’t disappointed!

From a common sense perspective, given that the backdrop to the Autumn Statement was high inflation, wage inflation, economic challenges and a looming General Election, in my view any significant tax cuts were more of an aspiration rather than an expectation.

All of the changes announced really just serve to maintain the status quo.  Business rate relief was retained, and the 100% capital allowance claim for qualifying plant and machinery has been retained. I like this last relief – it stimulates activity (purchasing new equipment) and accelerates the allowances on this.  But let’s be clear – it is an acceleration of relief, not an additional relief.

The self employed were also given a small helping hand (very small) with the abolition of Class 2 National Insurance – a saving of £3.45 a week.

Employees were, perhaps, the greatest beneficiaries with a 2% cut in the main Class 1 National Insurance rate, which will go some way to easing inflationary and interest rate pressures.

But, overall, I think it is fair to say that Mr Hunt has perhaps kept his political powder dry.  We have a Spring Budget which might, if one is sceptical, be a better bet for the announcement of more generous tax policies.  Did someone say there is a general election coming?  

The devil is always in the detail, therefore there may be further snippets to add to the headlines in the coming days but otherwise, that’s it folks!
 

Chris Maslin, who lives in Kent and who runs GO EO, a company which specialises in helping business owners to exit their company by creating an employee ownership trust. For more information visit https://goeo.uk/

Public debt is now forecast to start reducing in five years’ time. Given reducing debt was one of, if not the, main thing the Conservatives insisted needed doing as soon as they came to power 13 years ago, it's depressing that debt is still rising.

The reality is high inflation has hurt your average Joe, but helped the government. This is partly due to income tax thresholds not increasing in line with inflation (aka "fiscal drag"), so when people get superficially high pay rises just to help them meet higher costs of living, more of their income is taxed at higher rates. So tax intake increases without the government increasing tax rates. 

The 2% cut to NICs for your typical employee is a huge boost, and definitely a move in the right direction. A cut that benefits the majority of working people, including low/modest earners. 

Whilst 2% may not sound huge, it's a bit of extra money in almost everyone's pay packet every month. Bringing it in from January 2024 rather than April 2024 (start of the new tax year) may seem good, as people get the benefit earlier...but I fear this is a mistake. 

It will put extra work on payroll providers who have to implement a mid year adjustment. December and January is the busiest time of year for accountants any way.

Overall, I think the announcements today are a step in the right direction...but it's too late. The damage caused by previous Conservative policies have left us in a grave situation that it will take some time to recover from.
 

Michael Blaken, accounts director at accountancy and law firm Optimum Professional Services. For more information visit https://www.optps.co.uk/

“The Chancellor talked about growth measures to back British business and rewarding work, but there wasn’t a huge amount of substance behind it.

“Reducing employee National Insurance and raising the National Living Wage are good news for low income earners, but this will impact employers of those low earners, such as shops and pubs, who have to fund the wage increase.

“It is good news that the small business rates relief scheme remains in place, and businesses will welcome full expensing for investment being made permanent. However, there is not a great deal in the Autumn Statement for a business of our size.”
 

Jon White is the founder of RWB Auctions in Royal Wootton Bassett and he also runs several other businesses with his team including Old Bank Antiques, Gold Traders and the Britannia Coin Company. For more information visit https://www.rwbauctions.com/

It's well known that businesses grow and contribute more to the economy when taxation is lower, so today's announcements are welcome. 

However, it's a shame nothing has been mentioned in relation to the much-needed overhaul of business rates. High Streets across the UK continue to decline, due to the disparity between High Street and out-of-town business rates and the competitive advantage that online retailers have.

If this thorny issue isn't tackled soon, large retailers will continue to desert High Streets, which form the heart of many communities. 
 

Dave Southby, a financial adviser based in North Wiltshire who is a partner with St James’ Place. For more information visit https://davesouthbyfp.co.uk/

The overall economic outlook from the Office of Budget Responsibility (OBR) seems to be more conversative compared to the Spring statement. This to no doubt to reflect the Bank of England’s economic forecast of higher interest rates for longer.

I welcome the change to N.I with the abolishment of Class 2 and the reduction in Class 1 and Class 4. This will simplify the tax system and give millions of people a tax cut.

The Chancellor made comments around having ‘one pension pot for life’ and although this sounds like a good idea in theory, I fear in reality this is going to be hard to facilitate. This is going to make it very complicated for employers to administer on a monthly basis as they may have several different providers to pay. This also emphasises the importance of advice so employees understand the pros and cons of doing this.

The triple-lock remains! This is a welcome announcement to many pensioners receiving their money but also to the millions who are set to receive State Pension in the near future.

Universal Credit and minimum wage are to increase which will help relieve the financial pressures of inflation felt over the past 18 months.