On Wednesday, 22nd November, Chancellor Jeremy Hunt delivered the Autumn Budget 2023 to Parliament and summarised the UK’s economy and upcoming tax and spending changes that will impact us all. Please keep reading for a summary of all the announcements, split into helpful sections.
Taxes and salaries
- From 6th January 2024, over 27 million people will benefit from the lower National Insurance, as the main rate will fall from 12% to 10%.
- Self-employed professionals earning over £12,570 are required to pay Class 2 National Insurance. From April 2024, Class 2 National Insurance will be abolished. Self-employed professionals will also benefit from a reduction in Class 4 National Insurance, as it will be cut from 9% to 8% (payable on profits between £12,570 and £50,270).
- The National Living Wage will increase to £11.44 from £10.42 (from April 2024). This new rate will apply to 21 and 22 year olds, rather than just workers 23 or above.
Benefits and pensions
- From April 2024, Universal credit will increase by 5.7% (and other benefits), which is in accordance with the UK’s inflation rate (September).
- The government will invest £1.3 billion over the next five years to help people with health conditions find work. An additional £1.3 billion will be used to help workers who have been unemployed for over 12 months.
- Local Housing Allowance rates will be unfrozen and will be increased to 30% of local rents.
- The Work Capability Assessment is going to be reformed.
- Claimants who are considered able to work but decide against it will lose access to benefits and extras such as free prescriptions.
The economy and public finances
- Predictions by the Office for Budget Responsibility (OBR):
- The economy to grow 0.6% this year, 0.7% next year, 1.4% in 2025, 1.9% in 2026, 2% in 2027 and 1.7% in 2028.
- Forecasts indicate that the rate in which prices are rising will decrease to 2.8% by the end of 2024.
- In 2025, the rates in which prices rise will be 2% (in line with the Bank of England’s target).
- Borrowing forecast to fall to 3% of GDP in 2024/2025 (down from 4.5% in 2023/2024).
- The underlying debt forecast is estimated to be 91.6% of GDP next year; 92.7% in 2024/2025, and 93.2% in 2026/2027, before falling to 92.8% in 2028/2029.
Business
- The “full expensing” tax break which allows companies to deduct spending on new machines and business-related equipment from profits will be made permanent.
- The 75% business rates discount for businesses in retail, hospitality and leisure will be extended 12 months.
- Homeowners living close to newly installed pylons and transmission infrastructure will receive up to £1,000 off energy bills for 10 years.
- £4.5 billion funding will be made available to “attract investment to strategic manufacturing sectors, including green energy, aerospace, life sciences and car-making”.
- There is a permanent tax break for companies that allows them to save on corporation tax by investing.
Other
- The mortgage guarantee scheme is going to be extended to June 2025. This scheme helps first-time buyers take out a mortgage on properties up to £600k with a 5% deposit.
- Duty on alcohol has been frozen until at least August 2024.
- The government will provide £5 million funding for Imperial College and Imperial College Healthcare NHS Trust. This money will be used to set up a Fleming Centre to work on new health innovations.
- The state pension will rise by 8.5% from April 2024 to £221.20 per week.
Top 10 umbrella companies
You must use an umbrella company that pays you compliantly. To help you pick a trustworthy umbrella, we have collated a list of our top 10 umbrella companies, and they are all accredited by the Freelancer and Contractor Services Association (FCSA) or Professional Passport. Some of our top 10 have special offers at the moment that you won’t want to miss!
