The headlines in the build-up to the Autumn Statement promised radical reform to the established UK tax regime, but when the time came, the Chancellor focussed on incremental change in the short-term. In a wide-ranging statement which covered everything from pints to pensions, the headlines were National Insurance reductions and making permanent the full expensing business deduction.
Despite the 110 proposals, we have not seen policy development that significantly impacts investors and personal wealth planning. With the Spring Budget due to take place in March 2024, there is still time for more significant change, as we move toward a general election.
Having reviewed the full statement, the few items relating to financial planning are noted below:
- The Chancellor announced a consultation on lifetime pensions, allowing investors to have one pension throughout their working life, rather than having a different one with each employer.
- Freedom for investors to make multiple subscriptions to ISAs of the same type, each year from April 2024. Partial transfers of ISAs between providers will also be permitted.
- A cut in the main rate of class 1 employee NICs, from 12% to 10%, taking effect from as soon as 6 January 2024. There will be a reduction in the main rate of class 4 self-employed NICs, from 9% to 8%, from 6 April 2024, when class 2 NICs will be abolished.
- Making permanent the full expensing of investments by companies in qualifying plant and machinery, so it will continue after April 2026.
- The continued freeze of the main income tax allowances and thresholds, the main national insurance contributions thresholds and the inheritance tax nil rate bands for 2024/25.
- A full triple lock increase of 8.5% for 2024/25, for state pensions and pension credit. Universal Credit and most other benefits will increase by just 6.7%, in line with CPI inflation to September 2023.
- A 9.8% increase in the national living wage to £11.44 an hour.
Please click here for a full summary of the Autumn Statement, covering all announcements and the allowances for the year ahead.
If you would like to discuss any of the points raised in the Autumn Statement or your wider financial position, please call 020 7444 4030 or email us at info@partnerswealthmanagement.co.uk.
The contents of the article have been prepared solely for information purposes. The article contains information on financial products and services and such information is designed for and addressed solely to individuals seeking generic industry information. Past performance is no guide to future returns. The above content does not represent a personal recommendation. Taxation will depend on your individual circumstances and may be subject to change.