The Autumn Statement was delivered by Jeremy Hunt on Wednesday 22nd November and included a number of measures designed to stimulate growth in the economy. However, this did not extend to tax cuts, as had been suggested in the press beforehand.
Income Tax, Capital Gains Tax and Inheritance Tax all remain at current rates, however, please do remember that the Capital Gain Tax Allowance is reducing to £3,000 per annum and the tax free Dividend Allowance is reducing to £500 per annum from 6th April 2024.
Below is a summary of the key points:
National Insurance (NI)
For employees – the main rate of NI will be cut by 2% for earnings between £12,570 – £50,270 from 6th January 2024.
For the self-employed:
Class 2 NI contributions
- Will be abolished from April 2024, for those with annual profits in excess of £6,725. The current weekly rate is £3.45 per week, for annual profits over £12,570. Individuals will still be able to access contributory benefits, such as the State Pension.
- Those with earnings below £6,725 must pay voluntary Class 2 contributions if they wish to retain access to the State Pension, and other benefits (there may be further changes to this next year). The rate will be frozen at £3.45 per week.
Class 4 NI contributions
- The rate will fall by 1% to 8%, for earnings between £12,570 – £50,270.
For employers there were no change to employer NI rates, which will remain at 13.8%.
Lifetime Allowance for Pensions
Changes to the LTA were announced in the Spring Budget (you can read the details here: https://ebsuk.com/budget-update-spring-2023/). Further clarity was given around two new allowances which will be introduced from 6th April 2024 – the Lump Sum Allowance and the Lump Sum & Death Benefit Allowance.
We are in the process of considering the full changes in this regard and will provide further detail in due course.
Individual Savings Account (ISA)
Although ISA allowances remain unchanged (£20,000 for adults and £9,000 for juniors), there were several changes to ISAs announced, which will apply from 6th April 2024:
- Individuals will now be able to subscribe to multiple Cash or Stocks & Shares ISAs in the same tax year (although the overall allowance of £20,000 must still be adhered to).
- It will be possible to do partial transfers of ISA funds – at the moment this is not possible for current year ISA subscriptions.
- The age at which an adult ISA can be opened will be fixed at age 18 for all ISA types (currently an adult cash ISA can be opened by 16 and 17 year olds).
State Pension
It was confirmed that the State Pension will increase by 8.5% from next April.
The full New State Pension will, therefore, increase to £221.20 per week and the Basic State Pension to £169.50 per week for a single person or £271.05 per week for married couples/civil partners.
Should you wish to discuss any of these changes, please contact Val or Claire, to discuss further.
