Autumn Statement 2023 – The Overview

Autumn Statement

The Chancellor, Jeremy Hunt, made a statement on our economy last week. The Autumn Statement 2023 unveiled the current government’s tax and spending plans. The statement also focused on the growth of the British Economy over the coming years.


The UK Economic Outlook


The Chancellor expressed a strong desire to prioritise the expansion of the economy after it has remained stagnant over the years. Although the revised OBR growth figures were positive, they still fall on the lower side, which is concerning. Jeremy Hunt therefore presented a set of measures aimed at promoting work and growth.

Despite the economy recovering well from the pandemic and coping well with the energy shock, the prediction by the Office of Budget Responsibility (OBR) is that inflation will remain high.

According to the OBR, inflation is expected to stay above the government target of 2% for a longer period. It is predicted to return to the 2% target only in the second quarter of 2025.

This is more than a year later than forecast in March! More persistent inflation means markets expect interest rates to be more than a full percentage point higher than assumed in March.  This meant the Chancellor was restricted to what taxes he could cut.

The current parliament has implemented the highest tax-raising measures in the history of the UK. According to the Institute of Fiscal Studies (IFS), during the last general election, tax revenues accounted for approximately 33% of the national income.

However, based on the current projections, by the time of the next election in 2024, tax revenues are expected to reach around 37% of the national income. This level of taxation is unprecedented since World War II.

So, what measures could the Chancellor really announce against this backdrop?


Tax Announcements – Autumn Statement 2023


  • A cut in employees National Insurance contributions from 12% to 10% from 6 January 2024.
  • Measures to support corporate capital expenditure – the capital expenditure tax break for businesses that allows them to save on corporation tax by investing, has been made permanent.
  • A new simplified research and development (R&D) tax relief, combining the existing R&D expenditure credit (RDEC) and SME schemes.
  • Business rate relief extended – a freeze on the small business multiplier for a further year.
  • The 75% business rates relief for retail, hospitality, and leisure to be extended to 2025.
  • Class 2 National Insurance contributions (NIC) for the self-employed will not be required from 6 April 2024.
  • A cut in the rate of Class 4 NIC from 9% to 8% on self-employment/partnership profits between £12,570 and £50,270.
  • If you are earning more than £150K via PAYE , you won’t need to complete a tax return from 2024/2025



Other Business Announcements – Autumn Statement 2023


  • The Chancellor emphasized the importance of a more productive state rather than a bigger one while addressing the issue of high public spending. He set a new goal for the public sector to increase productivity by a minimum of 5% annually.
  • A 9.8% increase to the minimum wage to £11.44 per hour from April, which will be expanded to 21 and 22-year-olds.
  • All self-employed people can now use the “cash basis” of preparing accounts making it easier to do the accounting.
  • A consultation on giving pension savers a “legal right” to require a new employer to pay pension contributions into their existing pension”.
  • Further funding of £50M to increase apprenticeships in engineering and other key sectors.
  • Additional levelling up and Artificial Intelligence funding.
  • Extending the financial incentives for Investment Zones and tax reliefs for Freeports from five to ten years.


The full measures of announcements in the Autumn Statement 2023 can be found here


The takeaways from the Autumn Statement 2023


The Autumn statement delivered some positive steps for SME’s such as:

  • the freeze in the small business multiplier for business rates
  • 100% deduction of capital items indefinitely
  • Cutting National Insurance

But it appears that the OBR does not anticipate these measures to have a significant impact on our economy and lead to substantial growth.

The “full expensing” of capital expenses has been appreciated by many businesses. However, it’s worth noting that SMEs have had the ability to claim 100% capital allowances for quite some time now. Despite this, the availability of this benefit alone has not led to increased investment, even though it does provide a sense of certainty which is always a positive thing.

Smaller businesses have been crying out for help with late payments. Maintaining a healthy cash flow in the current economic climate remains key for a lot of businesses.  The announcement of the publication of the Payment & Cash Flow Review Report was very much welcomed.

Jeremy Hunt went on to say the public sector will “lead by example”.  Firms bidding for government contracts must demonstrate that they pay within 55 days from next April reducing to 45 days from 2025 and eventually to 30 days.

What is clear is that the Chancellor is relying on business to deliver the growth he has in mind.

He is freezing the overall public sector spending, which means no growth in the sector. There are no plans for significant infrastructure spending in the next five years.

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