Earlier today (Wednesday, 22nd November 2023), Chancellor of the Exchequer, Jeremy Hunt, delivered the Autumn Statement 2023 in parliament. Some important announcements were made that will impact contractors and freelancers (as well as small business owners). Keep reading to learn more about the Autumn Statement 2023, including the views of the Freelancer and Contractor Services Association’s Chief Executive, Chris Bryce.
The umbrellacompanies.org.uk team has written a short, snappy summary of the general key announcements in the Autumn Statement 2023.
“Chancellor Jeremy Hunt’s second Autumn Statement has made waves”
In an official release on the FCSA’s website, Chief Executive, Chris Bryce, wrote his official response to the Autumn Statement and highlighted key areas that will impact contractors and freelancers in the UK.
“Chancellor Jeremy Hunt’s second Autumn Statement has made waves, primarily for its headline act: a reduction in Employee’s National Insurance Contributions (NICs) from 12% to 10%. This move translates into a welcome tax cut for approximately 27 million workers in the UK. Notably unconventional was the immediate implementation from January 6th, 2024, a departure from the traditional April commencement. The self-employed, specifically, have reason to celebrate with the abolition of Class 2 NICs and a significant reduction in Class 4 NICs from 9% to 8%, providing a substantial boost for sole traders.
In the contractor realm, Chancellor Hunt’s proactive steps to combat late payments have been met with approval. However, a noteworthy development that might present administrative challenges for employers is the proposal requiring them to contribute to the pension provider of choice for individuals with existing schemes. The specifics of this initiative, including its potential impact on salary sacrifice arrangements, await detailed clarification.
As well as these headline changes, there’s been some significant movement in other areas. The Living Wage – as presaged earlier in the week – will rise to £11.44 per hour and the age threshold reduced from 23 to 21 – a big boost for the low-paid. A second, most welcome, change is the Chancellor’s commitment to introduce tougher consequences for promoters of tax avoidance schemes, including a new criminal offence for those who continue to promote avoidance schemes after a stop notice is issued HMRC will also get wider powers to act against directors of tax avoidance schemes.
While the Budget’s overarching theme revolves around incentivising business investment, featuring measures such as extended full expensing, the introduction of more freeports, and prolonged small business rates relief, there was a conspicuous absence of any mention of umbrella regulation.
This omission may disappoint some, but it aligns with the fact that government has yet to publish its response to the consultation, which closed in late August. Furthermore, including such measures solely in a Finance Bill poses technical challenges, offering a plausible explanation for their exclusion from the Chancellor’s speech. On a lighter note, the decision to freeze duties on wines, beers, and spirits is a welcome lifestyle touch that is likely to resonate positively with many.”
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