Round 2! The Biggest Tax Cuts in Modern British History!
Upon the sharp, and rather unexpected, decline of the inflation to 4.6% last month (October), Chancellor Jeremy Hunt ended up with a whopping extra £25bn cash -which was £6bn during the Spring Budget- that paves the way for the decision that`ll make everyone happy: Tax Cuts!
The Autumn budget proposed by Jeremy Hunt includes significant tax cuts aimed at stimulating economic growth and fostering a favourable business environment.
The chancellor`s plan underscores the importance of reducing the burden of taxation on both individuals and businesses, fostering an ecosystem that encourages investment, innovation, and growth, and of course, quick pocket money for the "average household"
This approach reflects a commitment to revitalizing the economy and supporting the hard work of businesses and workers across the country. Following PM`s statement that "hard work will be rewarded" the immediate thought was focused on National Insurance and Income Taxes cuts which the Brits have been paying the highest threshold since the records began 70 years ago.
Benefits
Benefits are to increase by 6.7%, coming into effect from April 2024. The most important incentive in the Chancellor`s agenda is the “local housing allowance rate” which he will give £1.6m. In doing so, Jeremy Hunt aims to boost £800 support for an average household in the UK.
Self-Employed Tax Cuts
With a completely surprising manoeuvring, Jeremy Hunt started his second half of the announcement by stating that he ABOLISHED Class 2 National Insurance Contributions for Self-Employed, which is presumably give £192 yearly saving for a Self-Employed. He also pulled down Class 4 National Insurance Contributions from 9% to 8% for those who earn between £12,570 and £50,270.
Pension
The most generous increase took place in this bit of the statement with a whopping tripled state pension following the Chancellor`s Autumn Budget. State Pension is to rise by 8.5%, which adds up to £221.20 a week for state pensioners. This comes to approximately £900 extra cash per year.
Business Support
Loss-making companies are going to be taxed 19% instead of 25% corporation tax rate. The incentive was due in 2026, but following the chancellors` bold statement, it is now officially made permanent. Jeremy Hunt wasn`t subtle about his intentions of making the UK an AI power-house, for that he announced that he will invest a further £500m to innovation centres. For research and development, he promised a “simplified” tax system. R&D scheme caused a number of controversies over the years and HMRC had started mass investigations post-COVID, with that being axed to be more simply for everyone, Hunt aims to prevent any hesitation on research and development based businesses innovations.
To complete fixing the high street SMEs, the chancellor, rather in a jolly fashion, announced that all alcohol duty is frozen until August 2024, which will allow pubs, restaurants and bars to get more customer circulation and essentially, saving hospitality industry.
Businesses will be able to claim 25p in corporation taxes for every £1m they invest in technology, machinery and equipment. This, in particular, what makes this autumn statement 2023 as the biggest tax cut in modern British history according to the chancellor.
The Chancellor claimed that the total package will give rise to investment 1% of the total GDP.
National Insurance & Income Tax Cuts
In a move to bolster the disposable income of the average household, the Autumn Budget lays out plans to significantly reduce both National Insurance Taxes.
Mr Hunt spearheads the initiative by lowering the National Insurance will be cut by 2%. National Insurance is currently charged at 12% for people who earn £12,570 and £50,271. Following the cut the new NI tax is 10%, to which he added that he delivered his promises to reward the hard work. The tax cut will come into effect as of January 6.
In another words, an average salary of £35K will save around £450 a year.
These strategic tax cuts are designed to incentivise spending, stimulate economic activity, and, ultimately, lead the UK economy towards recovery from COVID.
Minimum Wage Increase
“If we want people to get up early in the morning, if we want them to work nights, if we want an economy where people go the extra mile and work hard, then we need to recognise that their hard work benefits us all” Jeremy Hunt, Autumn Statement, Nov 22, 2023.
The highly anticipated autumn statement by Jeremy Hunt has revealed a staggering 10% increase in minimum wage which is now an impressive £11.44! And that's not all. The benefits of this announcement extend to 21-year-olds, giving them a well-deserved boost in pay. This exciting change for millions of households will take effect in April 2024.
Conclusion
Overall, the Autumn Budget 2023 introduces a range of tax cuts and reforms that seek to boost economic growth, support families and businesses, and create a fairer taxation system. The proposed changes in National Insurance and Income Tax thresholds. The statement came as a surprise for many who expected cuts in Inheritance Tax and Stamp Duty thresholds to increase… None came this time. Having sparing an ear for the critics, Hunt focused on innovation, rewarding hard-working by cutting NI and a tribute to Self-Employed`s effort during the pandemic by abolishing Class 2 NI and dropping Class 4 NI.
