Autumn Statement 2023: Key Announcements for Contractors

Jeremy Hunt delivered his Autumn Statement 2023 to the House of Commons today (Wednesday the 22^nd of November). Our latest article highlights the key points in the Autumn Statement that will affect contractors and freelancers.

The Autumn Statement 2023

Chancellor of the Exchequer Jeremy Hunt has unveiled his Autumn Statement in the House of Commons today. The Autumn Statement sets out the government’s tax and spending plans for the year ahead, affecting millions of people’s take-home pay and household budgets in the UK and setting out how much will be spent on crucial public services.

To read the full Autumn Statement, please visit the government’s website.

Key Announcements for Contractors

Here are the main points outlined by Jeremy Hunt as part of his package or measures aiming to grow the UK economy.

Pensions

State pension payments will increase by 8.5% from April to £221.20 a week, almost an extra £900 a year. The triple lock will also be honoured in full. The triple lock is a commitment to increase the State Pensions by whichever is the highest of average earnings growth, CPI inflation, or 2.5%.

The government has also pledged to establish a pension pot for life scheme, allowing workers to nominate the fund their employer pays into to be allocated towards a pot for life. The pension pot for life scheme can follow workers as they move throughout their working lives.

Tax and Wages

National Minimum Wage

The National Minimum Wage (sometimes called the National Living Wage) will increase from £10.42 per hour to £11.44 per hour – an increase of £1.02 per hour. For the first time, the National Minimum Wage rate will apply to 21 and 22-year-olds rather than just those aged 23 and over. For anyone under 21, the minimum wage is lower. However, this is increasing along with the lowest legal pay for apprentices.

Those aged 18 to 20 will get at least £8.60 an hour from April, an increase of £1.11. For those aged 16 and 17 and apprentices, the minimum pay will be £6.40 – a rise of £1.12 compared to last year.

National Insurance

Employees earning more than £12,570 a year currently pay 12% National Insurance on pay up to £50,270. However, this will change from the 6^th of January. The main rate of National Insurance for employees will be reduced from 12% to 10%, impacting more than 27 million workers.

National Insurance for the self-employed

The Chancellor announced that he is making reforms to how National Insurance is paid to save around 2 million self-employed people an average of £350 per year. From April, he is abolishing Class 2 National Insurance paid by self-employed people earning more than £12,570. Class 4 National Insurance, which is paid on profits between £12,570 and £50,270, will be cut from 9% to 8% from April.

Benefits

Jeremy Hunt announced that he is making the most extensive set of welfare reforms in a decade and will get more than 200,000 more people into work. The Chancellor of the Exchequer declared that additional funding of over £1.3 billion would be made available over the next five years to help people with health conditions find jobs. A further £3.3 billion would also be available to help people who have been unemployed for over a year.

Universal Credit and other working-age benefits will increase by 6.7% from April, in line with September’s inflation rate. However, there will be stricter requirements for those who claim them to look for work. People claiming benefits will face mandatory work experience if they do not find a job within 18 months. The Work Capability assessment will also be reformed to reflect the availability of working from home after the COVID-19 pandemic.

The Local Housing Allowance rates, which determine the level of housing benefit and Universal Credit people receive to pay rent, which has been frozen since 2020, will be increased to 30% of local rents. For some households, this measure is worth up to £800.

Business and Infrastructure

Chancellor Jeremy Hunt has announced that he is making the “full expensing” tax break permanent. This allows companies to offset investment in items such as machinery and equipment against tax.

The 75% business rates discount for retail, hospitality and leisure firms has been extended for another year.

The Chancellor announced that around £4.5 billion in funding will be granted to attract investment to strategic manufacturing sectors, including aerospace, green energy, car-making and life sciences.

The total package of business measures outlined in the Autumn Budget is expected to help increase business investment by about 1% of GDP.

Other measures

Households living close to new pylons and transmission infrastructure will be granted up to £1,000 a year off their energy bills for a decade.

All alcohol duty has been frozen until the 1^st of August next year.

Funding of £5 million has been granted to the Imperial College and Imperial College Healthcare NHS Trust to set up a Fleming Centre to work on health innovations.

Up to £7 million will be given over the next three years to organisations like the Holocaust Educational Trust to tackle antisemitism in universities and schools.

Contact our expert Sales Consultants to find out more about our services

Churchill Knight has over 20 years of experience supporting contractors and freelancers with accountancy and payroll. Our FCSA-accredited limited company accountancy service and FCSA-accredited and SafeRec Certified umbrella service are contractors’ first choices for roles inside and outside IR35.

If you are interested in finding out more about our services, please call us on 01707 871622 or request a callback for a time that suits you.