Jeremy Hunt delivered his much anticipated Autumn Statement on 22 November 2023. Introducing national insurance cuts, and changes to pensions and investments, the chancellor is focused on long term economic growth, while inflation remains high.
Our Key Takeaways from the Autumn Statement:
National Insurance cut
- The main rate of Employee NICs (National Insurance contributions) will be cut from 12% to 10%, from 6 January 2024.
- The rate of Class 4 NICs on all earnings between £12,570 and £50,270 will be reduced from 9% to 8% from April 2024.
- Class 2 NICs, currently paid at a rate of £3.45 per week by the self-employed earning more than £12,570, will effectively be abolished from April 2024.
Individual Savings Accounts reforms
- Annual limits for ISA (Individual Savings Accounts), JISA, LISA and CTF have been frozen for 2024-25
- Various changes to ISA rules from April 2024 include:
- Allowing multiple subscriptions to ISAs of the same type every year
- Allowing partial transfers of ISA funds in-year between providers
- Harmonising the account opening age for any adult ISAs to age 18
- Expanding the investment funds allowed in the Innovative Finance ISA
Pensions
- The Triple Lock has been maintained. The basic State Pension, new State Pension and Pension Credit standard minimum guarantee will be uprated in April 2024 by 8.5%
- Measures are introduced to deliver the changes required to abolish the Lifetime Allowance entirely and to clarify the tax treatment of lump sums and lump sum death benefits.
- For ‘small pot’ pensions, the government is launching a consultation on a ‘lifetime provider model’ to simplify pensions by allowing individuals to have contributions paid into their existing pension scheme when they change employer.
Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS)
- For clients investing in EIS and VCTs, the expiry date for receiving tax benefits will be extended beyond 2025 as recommended by the House of Commons Treasury Committee.
- Income tax relief at 30% is available for investment into the EIS and VCTs and 50% into SEIS
Autumn Statement 2023 – GOV.UK (www.gov.uk)
November 2023
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One of our team can provide robust advice to help you understand what this means for your finances.
If you would like to arrange a no-obligation meeting to discuss your needs, please contact us on 0131 260 2760 or at info@mi-plc.co.uk
