HMRC will have a new set of powers from the 1 January 2024 that will require digital platforms to supply the details of individuals who are providing services or selling goods including those who operate small businesses, second-hand sellers, freelances, delivery drivers, taxi drivers and property owners.
The main headline from the Autumn Statement was the announcement that the Government will reduce National Insurance Contributions for both the employed and self-employed.
In the previous months, there was much comment from the Government that it was too soon to focus on tax cuts given their promise to halve inflation. However, in recent weeks the speculation grew that tax cuts would be considered and even that Inheritance Tax (IHT) may be abolished.
Research and Development (R&D) tax relief has been under the review by the government for a number of years, and the Chancellor’s Autumn Statement has confirmed the latest change.
The big news around the Autumn Statement was the cuts to National Insurance (NI), which impacts both employees through their class 1 contributions but also the self-employed. The Chancellor recognised the important work undertaken by the self-employed and wanted to simply the tax system for them.
The Government has further committed to investing in HMRC’s ability to ensure that everyone pays the tax they are due to pay. This will include allowing HMRC to target its debt collection activity, pursuing those with tax debts who can afford to pay, and providing support to those who are temporarily unable to pay. It is estimated to raise £5 billion over the next five years.
The main headline-grabber from the Autumn Statement on the employment side is the reduction of the main rate of employee National Insurance Contributions (NICs) from 12% to 10%, which comes into effect on 6 January 2024.
In his 2023 Spring Budget, the Chancellor sought to boost investment through changes to the capital allowances regime, including the introduction of full expensing relief effective from 1 April 2023. This was originally introduced as a temporary measure due to expire on 31 March 2026. In his Autumn Statement, the Chancellor announced that he was making the relief permanent.
Jeremy Hunt has delivered an Autumn Statement he said will grow the economy and back British businesses, but while many of the fiscal plans announced seem generous, businesses may still see increased financial pressure in 2024.