Main Takeaways from the 2023 UK Autumn Statement
- Main national insurance rate to be cut by 2%, from 12% to 10% for 27 million people
- Full expensing of capital investment for businesses made permanent. Business investment to improve by £20bn per year according to estimates
- State pensions to rise by 8.5% from April 2024
- Welfare benefits grow in line with the September’s CPI figure of 6.7% instead of the rumoured, lower October figure
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Tax Cuts, Debt Reduction and Massive Boost to UK Businesses
Last autumn, Chancellor Jeremy Hunt was brought in as damage limitation, now he has a tiny bit of wriggle room in his budget and has his sights set on growth. Now that inflation has been halved and stimulus/support packages have been phased out, the government has a minimal amount of headroom within the budget which many were anticipating would be utilized to ease the burden of taxes. They were right, well kind of.
The tax cuts weren’t applied to income tax but rather to the percentage of national income tax that will be applicable to 27 million people in the UK. This has now created an expectation that the prime minister’s calls for a drop in the basic tax rate will be the main event of the pre-general election budget in the spring.
Furthermore, businesses will be able to fully expense investment expenditure permanently. This is potentially going to attract around £20bn worth of investment per year. In addition, the UK government is committed to reducing the rate of government borrowing compared to the rate of economic growth – with OBR forecasts seeing debt as a percentage of GDP fall for the majority of the forecast period, approaching the low 90% level.
The OBR provided updates to its