Against a challenging fiscal backdrop and pressures to continue reversing inflation, the 2023 Autumn Statement presented an opportunity for the government to demonstrate solid plans for growth and win back public confidence.
Following previous suggestions of tax cuts being near-impossible, we’re sure you were as surprised as we were to watch a statement unfold that focused so strongly on tax cuts and allowances! However, in his statement delivery, Chancellor Jeremy Hunt explained how the government plans to grow the economy by removing barriers to investment and cutting taxes for businesses, rather than higher borrowing and untargeted support.
The tax cuts were focused on private sector growth, which will inevitably funnel money back into the economy, create more jobs, and support other British manufacturers/businesses.
The permanent extension of the Full Expensing regime was one of the main headline cuts, allowing businesses to claim 100% first-year allowance for main rate expenditure. Similarly, the RDEC and SME R&D tax relief schemes will be merged for accounting periods after 31st March 2024 at a 20% rate.
Hunt also highlighted some more industry-specific measures, such as freezing alcohol duties until August 2024 and freezing the small business multipliers for retail, hospitality and leisure properties for 2024/25.
The government also plans to work with the creative sector to provide additional tax relief for visual effects expenditure, hoping to make the UK an ideal environment to invest in high profile film and TV projects. On a similar note, the government will act on recommendations to review the current barriers to foreign investment, also hoping to improve the UK’s business landscape.
On the back of yesterday’s announcements, Joel Calitchi, Corporate Tax Partner added:
“We welcome the Chancellor’s focus on promoting business investment by permanently extending the full expensing regime, as well as cutting National Insurance rates to reward work. In the spring we hope to see further tax cuts, and a start on simplifying the UK tax system.”
Find out more about what the Autumn Statement means for you and your business in our full summary, now available to download!