The UK’s autumn statement was delivered on 22 November 2023. The significant tax changes are summarised below.
National insurance contributions
The main rate of Class 1 employee national insurance contributions (NICs) is to be reduced from 12% to 10% from 6 January 2024. The main rate of Class 4 self-employed NICs is to be cut from 9% to 8% from 6 April 2024. The Class 2 self-employed NICs are to be abolished from 6 April 2024. Self-employed individuals with profits between GBP 6,725 and GBP 12,570 will continue to obtain access to contributory benefits, including the State Pension, by means of a National Insurance credit, without the need to pay Class 2 NICs. Individuals with profits under GBP 6,725 and others who pay Class 2 NICs voluntarily to obtain access to contributory benefits will still be able to do so. For voluntary national insurance contributions the current rate of GBP 3.45 per week will continue for 2024/25.
Capital allowances
The two new temporary first-year allowances introduced in the Spring budget will continue for longer than originally planned. The Spring budget provided that for qualifying expenditure on the provision of plant or machinery incurred on or after 1 April 2023 but before 1 April 2026, companies could claim a 100% first-year allowance for main rate expenditure; and a 50% first-year allowance for special rate expenditure. Legislation is now being introduced in the Autumn Finance Bill 2023 to remove the sunset date of 1 April 2026. The government is launching a technical consultation on wider changes to simplify capital allowances.
Extension of EIS and Venture Capital Trust schemes
The Enterprise Investment Scheme (EIS) and venture capital trust (VCT) legislation currently contains sunset clauses limiting income tax relief to shares issued before 6 April 2025. The expiry date is to be extended to 6 April 2035, so income tax relief will continue to be available to investors in qualifying companies and VCTs.
Maximum prison term for tax fraud
This maximum prison term for tax fraud is being extended from 7 to 14 years.
Global minimum tax rules and domestic top-up tax
The Autumn Finance Bill will include changes to the legislation on the global minimum tax and domestic top-up tax introduced in line with the OECD’s pillar 2, to adjust the UK rules following stakeholder consultation and further international guidance.
Legislation in relation to the undertaxed payments rule (UTPR) under Pillar 2 will be introduced in future legislation and will apply for accounting periods beginning from 31 December 2024.
Research and Development Tax Relief reforms
The Autumn Finance Bill 2023 will contain legislation to merge the current research and expenditure expenditure credit (RDEC) and R&D SME schemes for accounting periods beginning on or after 1 April 2024. The legislation will also implement the enhanced support for R&D intensive SMEs previously announced in the Spring Budget 2023, providing a higher rate of payable tax credit for eligible SMEs.
Other
Other measures include:
- The income tax cash basis will be expanded for the self-employed and partnerships with effect from 6 April 2024.
- The government confirmed that Making Tax Digital (MTD) will be extended for self-employed individuals and landlords with annual income over GBP 50,000 with effect from April 2026; and those with income over GBP 30,000 from April 2027.
- The program of Investment Zones in England will be extended from five to ten years.
