Chancellor Jeremy Hunt delivered his Autumn statement today where he celebrated his “biggest business tax cut in modern British history, the largest cuts to employee and self-employed national insurance and the biggest packages of tax cuts to be implemented since the 1980’s”.
Minimum wage increase
The national living wage will rise to £11.44 in April for workers over the age of 21 from next year; a rise of more than £1,800 a year for a full-time worker.
The rate is currently £10.42 for workers aged over 23 and over, and £10.18 for those 21-22.
For those aged 18 to 20, the rate will rise from £7.49 to £8.60, while under-18s and apprentices will see an increase from £5.28 to £6.40.
National Living Wage
Workers on the national living wage will receive an extra £1,800 a year in the largest annual increase since its introduction.
The national living wage will rise to £11.44 in April next year, up from £10.42 for workers aged over 23.
For the first time, the rate will also apply to 21- and 22-year-olds.
The hourly rate for 18 to 20-year-olds will also increase by £1.11 to £8.60 per hour.
Universal Credit will go up by September’s higher inflation rate rather than the lower October index. This equates to £470m for 5.5m households, the chancellor claims.
Local housing allowance will be increased to the “30th percentile of local market rents”, giving “1.6 million households an average of £800 of support next year”.
Tobacco duty to increase but alcohol duty frozen until August next year.
From April 2024, the Government will increase the full state pension by 8.5% to £221.20 a week.
National insurance relief
Employers of veterans will get extra national insurance relief. A further £10m will be given to support the veterans’ places, pathways and people programme.
Plans are being consulted on which would allow employees to choose where their pension contributions from employers go which would stop people having to consolidate their pensions whenever they move jobs. Currently, employers automatically place workers into a scheme that has been selected by the company.
New investment zones
The Chancellor has announced three further investment zones focussed on advanced manufacturing in Greater Manchester, East Midlands and West Midlands.
The financial incentives for these zones and the tax relief for freeports will be extended from five years to 10 years, along with “a new £150m Investment Opportunity Fund to catalyse investment into the programme”.
Business rates relief extended
The 75% rates discount for retail, hospitality and leisure will all be extended for another year.
National insurance for self-employed people
The Government are abolishing Class 2 national insurance.
That is a “flat rate compulsory charge, currently £3.45 a week, paid by self-employed people earning more than £12,570 which gives state pension entitlement”.
Mr Hunt also announced changes to Class 4 national insurance. The a9% tax on earnings between £12,570 and £50,270 will be reduced to 8%.
National insurance cut for employees
The national insurance rate will be cut from 12% to 10% for employees and from tomorrow “urgent legislation” will be introduced to bring the measure in from 6 January 2024.
Stamp Duty Land Tax (SDLT) reforms bought in last year are due to last until 2025.
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