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  • Writer's pictureBrealey + Newbury

Autumn 2023 Statement

Updated: May 2

Chancellor's Autumn Statement

The Chancellor's Autumn 2023 statement had many positive measures for small businesses in the UK, Brealey & Newbury Accountants are happy to bring you a condensed and easy to understand summary of that statement and how it will affect our Mansfield based customers.

Chancellor Jeremy Hunt delivered the Autumn Statement 2023 with a focus on supporting small businesses and boosting British business investment. He emphasised the government's commitment to ending late payments, announcing measures to ensure prompt payment throughout the supply chain, particularly in large government contracts.

Starting in April 2024, Chancellor Jeremy Hunt will introduce a new condition for companies vying for large government contracts. This condition mandates that bidding companies demonstrate their commitment to timely payments by showcasing an average invoice payment period of 55 days. The requirement will gradually reduce to 30 days over time, reflecting the government's emphasis on promoting prompt payment practices within the business sector. Proper financial planning with the support of your small business accountant can help you to pay invoices more quickly.

One of the most anticipated announcements for businesses centered on the introduction of '110 growth measures.' These measures, designed to combat inflation and bolster business investment by approximately 1% of GDP, encompass several key initiatives.

A pivotal component of the growth measures is the permanent implementation of full capital expensing. This enables businesses to reclaim corporation tax when investing in essential equipment. Additionally, significant relief for the self-employed is in store, as class 2 National Insurance contributions will be eliminated, and class 4 contributions will see a one-percentage-point reduction. These adjustments hold the potential to result in substantial annual savings for sole traders.

Furthermore, the decision to maintain the 75% business rate discount for the hospitality sector was highlighted. Valued at £4.3 billion, this freeze is expected to provide considerable support to an industry still in the process of recovering from the challenges posed by the pandemic.

The latter measure, originally introduced to mitigate the impact of the pandemic, is extended for an additional year to provide continued relief.

Acknowledging the significant contribution of the self-employed during the pandemic, Hunt unveiled a major reform by abolishing Class 2 National Insurance, a flat-rate charge for self-employed individuals, and reducing Class 4 National Insurance by 1 percentage point. These changes are expected to save around 2 million self-employed people an average of £350 a year from April.

In a landmark move, the Chancellor announced the permanent implementation of "full expensing" for business investment. This measure allows companies to deduct £250,000 off their tax bill in the same year for every million pounds invested. Described as the largest business tax cut in modern British history, the move is aimed at increasing business investment by around £3 billion annually, totalling £14 billion over the forecast period.

Hunt outlined a comprehensive strategy for growth, encompassing skills development, planning and infrastructure reform, pension fund reform, support for innovation industries, and a commitment to leveling up. The overall impact of these measures is projected to boost business investment in the UK economy by around £20 billion a year within a decade, representing nearly 1% of GDP at current levels. The Chancellor emphasised that this significant investment is crucial for closing the productivity gap, raising wages, and improving living standards across the country.

If you have any questions on how these measures will impact your business, please don’t hesitate to contact us for help.


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