On the back of last week's positive news of falling inflation, Jeremy Hunt seemed to have a spring in his step as he launched a series of changes with an air of confidence and optimism.
There has been much speculation over the past week on Inheritance Tax changes and possible tax cuts. There was no mention at all about Inheritance Tax but there were announcements of reductions in national insurance and full expensing for capital expenditure.
Here are some of the headlines:
• A reduction in employee's Class 1 NIC from 12% to 10% on earnings between £12,570 and £50,270 from 6 January 2024.
• Class 2 NICs abolished for the self-employed and a reduction in Class 4 NICs from 9% to 8% in April 2024.
• Full expensing for capital expenditure has been made permanent, which will give 100% relief and much needed certainty for businesses investing over the long term.
• The expected merging of the R&D tax relief schemes into a single simplified regime.
• There were promises of £500m investment in AI technology over the next two years and extending the 5 year tax breaks in investment zones to 10 years. Additional investment zones were announced in the East Midlands, West Midlands and Manchester.
• A hard line will be taken with welfare and benefits reform, aimed at getting more people into work and the National Living Wage will increase to £11.44 in April 2024.
Please get in touch if you would like to discuss the changes in more detail and understand their impact on you.
