Rounding Up the Autumn Statement Predictions

With Chancellor Jeremy Hunt set to deliver the 2023 Autumn Statement next Wednesday, 22 November, many are still debating as to which measures will be announced.

The UK’s leading business groups have put forward their Autumn Statement wishlists to the Chancellor, calling for a range of changes to such measures as green policies, incentives for net zero transition, the threshold for Small Business Rates Relief and business investment.

This blog post summarises the key Autumn Statement predictions.

Altering business rates relief

Business groups, including the Federation of Small Businesses (FSB), have urged Chancellor Jeremy Hunt to use the Autumn Statement to extend the 75% business rates relief discount for retail, hospitality and leisure firms. The FSB has called for the relief to continue beyond the April 2024 cut off date in England, stating that this would give thousands of small firms a lifeline while they handle rising costs.

The FSB also called for an increase in the threshold for Small Business Rates Relief (SBRR) from £12,000 to ‘at least’ £25,000, which would remove over 250,000 small firms from the current business rates system.

Overhauling the pensions triple lock

Pensions experts believe the Chancellor will use the Autumn Statement to overhaul the pensions triple lock. Many expect the State Pension to rise in line with wages at a rate of 7.8% rather than the 8.5% that would include bonuses as part of total pay. A 7.8% rise will increase the basic pension to £837 in 2024, rather than £902, which would be reached if bonuses were included as part of total pay.

Cutting inheritance tax and Stamp Duty

Whilst the Chancellor has ruled out cuts to personal taxes, reports suggest Mr Hunt is considering cuts to inheritance tax (IHT) and Stamp Duty. One option available to the Chancellor is lowering the tax rate – the UK currently has one of the highest IHT rates in the world at 40%. Reducing this rate would go some way to helping individuals cut their bills, experts have stated.

Meanwhile, a cut in Stamp Duty could be targeted at ‘last-time homebuyers’ in England, and help encourage older homeowners to move into smaller properties, freeing up larger homes for families.

Rejecting calls to make Full Expensing permanent

Reports indicate that the Chancellor will reject calls made by business groups to make Full Expensing permanent. Full Expensing allows companies to deduct the cost of qualifying plant and machinery from their profits straight away, with no expenditure limit. Under current guidance, Full Expensing will end on 1 April 2026.

However, the Confederation of British Industry (CBI) has called for Full Expensing to be made permanent in order to ‘unlock business investment across the country’. Analysis carried out by the business group found that the permanency of Full Expensing could lead to a 21% boost to business investment in the UK and a 2% increase to GDP by 2030/31.

Reviewing the benefits sanction regime

During his speech to the Conservative Party Conference in early October, Mr Hunt pledged to review the benefits sanction regime. According to the Chancellor, ministers will analyse the regime to make sure the requirements to seek work that apply to certain benefits are enforced. Additionally, the Chancellor’s review could include changes to training, apprenticeships and other pathways into work.

Outlining the results of the small business Making Tax Digital review

Experts at the Chartered Institute of Taxation (CIOT), Association of Taxation Technicians (ATT) and the Low Incomes Tax Reform Group (LITRG) anticipate learning the results of the small business Making Tax Digital (MTD) review, and ‘possibly further aspects in relation to the project’. The CIOT, ATT and LITRG have previously expressed their concerns in regard to the MTD programme.

Keep clients up to date on the Autumn Statement announcements with Mercia’s summaries

Following the Autumn Statement, Mercia will be creating a range of digital products that you can use to keep your clients up to date. Our Statement products are designed to provide key information on any tax changes and will be available shortly after the Chancellor has delivered his speech.