Autumn Statement: How It Effects Private Tax Clients

23rd November 2023

Are you wondering how the Autumn Statement effects Private Tax Clients?

This year’s Autumn Statement arrived at a time when both businesses and individuals alike are well and truly feeling the squeeze. With the performance of the economy better than expected this year (according to the Office for Budget Responsibility), but expected to grow slower than expected next year, no one could be certain what was going to be announced.

Mr Hunt’s first Statement last year saw many tax allowances reduced and rates frozen, resulting in an average increase in taxes and general reduction to people’s pockets in real terms.

This year’s Statement brought much more welcome news for taxpayers, with the main focus being around National Insurance (NI) contributions.

With effect from 6 January 2024, employees NI will reduce by two percentage points, to 10%.

A similar change will also apply to self-employed individuals and partners of partnerships; their rate of NI will reduce by one percentage point, from 9% to 8%, but not until April 2024. Class 2 NI contributions have also been scrapped for those with profits over £6,725 from 6 April 2024, saving what would have been a cost of £192 a year. The government have also decided to maintain the current rate of £3.45 per week for 2024/25 (rather than the £3.70 per week originally set) for those who pay Class 2 voluntarily.

These changes come less than two years after we last saw a change to NI, when the Health and Social Care Levy was introduced and then withdrawn just seven months later.

No other changes to personal taxes were announced, despite a lot of prior speculation.

Whilst on the face of it, the NI cut will leave more in workers’ pay packets, the fiscal drag will remain an issue for many.