Chancellor Jeremy Hunt
Chancellor Jeremy Hunt unveiled new measures to “get the economy back on track” in his autumn statement on Wednesday, as he set out “110 policy measures” to boost growth.
While the Chancellor did not set out all 110 measures, he revealed key tax changes aimed at boosting British business, including making the ‘full expenses’ deduction permanent.
Crucially, the Chancellor also announced a cut in national insurance from 12 to 10 per cent, and the complete abolition of class 2 national insurance for those on lower incomes.
The triple lock increase in state pensions of 8.5 percent was also confirmed.
Hunt froze alcohol taxes and unveiled plans aimed at speeding up business planning applications and building more homes.
Hunt promised that the autumn statement will “reduce debt, cut taxes and reward work.”
Yet, despite its ‘growth plan’, the Office for Budget Responsibility has downgraded growth prospects for the coming years, but raised the outlook for this year.
We explain all important announcements and what they mean for your finances.
> Use our calculator, powered by tax experts Blick Rothenberg, to see what today’s measures mean for you:
Essential reading of the Autumn Declaration:
> The state pension will rise by 8.5% from April – with a huge threefold increase of £902
> Will your 2% income tax cut be wiped out by the secret income tax freeze?
> Do you want ONE pension pot for life? How would the plan work?
> The 5% mortgage scheme extended, but no Lifetime Isa boost
> Isa rules ‘simplified’, but £20,000 allowance frozen for a seventh year
> Selling NatWest shares to ‘get Sid investing again’ – but would investors want to buy?
The OBR raised its outlook for this year but cut GDP forecasts for the next three years compared to March budget papers, then gave 2027 a slight increase
But the OBR raised forecasts for the overall size of the economy
OBR predictions
The Office for Budget Responsibility has sharply revised downwards its economic growth forecasts for 2024 and 2025.
The economy is expected to grow 0.7 percent in 2024, compared to 1.8 percent previously, while expectations for 2025 have fallen from 2.5 to 1.4 percent.
According to the OBR, inflation will reach 2.8 percent at the end of 2024, before falling below the Bank of England’s 2 percent target in 2025.
> Ten OBR forecasts: falling house prices, persistent inflation and weaker growth
Personal tax
The main rate of National Insurance will be reduced from 12 to 10 percent.
The chancellor announced he would abolish Class 2 National Insurance altogether, saving ‘the average self-employed person’ £192 a year.
The Chancellor confirmed cuts to national insurance for 28 million people.
Meanwhile, alcohol duties will be frozen until August next year.
Pensions and benefits
The Chancellor confirmed that universal credit and other benefits would rise by 6.7 per cent, in line with September’s inflation rate rather than October’s much lower figure.
The triple lock means the state pension will rise by 8.5 per cent from April to £220.20, worth up to £900 more a year.
The living wage will also rise to £11.44 from April 2024
Hunt will also consult on pension reforms give people the opportunity to have one pension pot for life.
It’s part of a broader package of pension measures to stimulate economic growth. According to the Chancellor, this could contribute to an additional pension income of £1,000 per year for an average earner aged 18 and over who saves.
Company
It was an autumn statement that hit the business community hard, with the Chancellor promising ‘the biggest tax cut for businesses in British history’.
The so-called full expenditure, where companies can deduct all expenditure on IT equipment, installations or machines from taxable profits, was made permanent
Hunt has also lined up £4.5 billion of investment for manufacturing up to 2030, and £500 million of funding for artificial intelligence initiatives.
Positive news for the catering industry is that the temporary 75 percent tax reduction for companies has been extended until 2025.
Hunt unveiled plans to speed up planning applications through new reforms, lLocal authorities will be able to recoup the full costs of large business planning applications to meet faster timelines.
Property
Hunt decided to increase local housing benefit, claiming the new level would amount to around £800 to support 1.6 million households a year.
Controversially, he announced that developers would be allowed to use permitted development to turn houses into two apartments, as long as they do not change the appearance.
Interest rates are expected to remain above 4% until 2029
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. That helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow a commercial relationship to compromise our editorial independence.