Autumn Budget Statement
Autumn Budget Statement Winners and Losers
Private Client Manager Jonathan Barratt reveals who the winners and losers are from the Chancellor’s Autumn Statement announcement
- Those on benefits will see an increase at the listed rate of inflation for September (6.7%) rather than at the lower rate for October, which could easily have been used given the timing of the Budget.
- These individuals could also see a benefit with the increasing Local Housing Allowance (LHA). The LHA has been increased to cover the bottom 30% of market rents.
- Anyone that enjoys a tipple at their local public house will be pleased to note the freeze in Alcohol Duty until August 2024, although it remains to be seen what changes Mr Hunt has planned beyond this date.
- Recipients of the state pension continue to benefit from the Triple Lock with a material increase to the new state pension from April 2024. This increase pushes the state pension up to £221.50 a week or £11,518 a year.
- For those who have served in our nation’s armed forces, veterans will find they continue to be supported into the workplace with an extension to the NIC relief for employers of eligible veterans alongside additional funding for programmes to assist their transition to civilian roles.
- The National Living Wage has seen an increase to £11.44. This increase will generally benefit all on lower incomes.
- Self-Employed individuals who are paying class 4 NIC will likely see the greatest benefit of the NIC changes.
- Not only have they seen a reduction in the main rate of class 4 NIC on business profits, but they will no longer be required to pay class 2 NIC.
- Employees will also see a benefit with the reduction of class 1 NIC from 12% to 10%. This could provide a maximum benefit of £754 (on an annualised basis).
- Smokers are again seeing above RPI increase in duty rates. Particularly hit by this will be those who enjoy hand rolled cigarettes with an RPI plus 12% increase. This is likely to be one of an ongoing number of increases in tobacco duties going forward, given the Prime Minister’s pledge to continually stub out smoking.
- A relative loser in all of this is the small business owner who draws a minimal salary from their company, as they will see no benefit from the changes introduced, and those without a business premises won’t even benefit from the business rates freeze.
- Self-employed individuals who have an income below £6,725 will still need to make voluntary Class 2 National Insurance Contributions (NIC) in order to obtain a qualifying year for state pension purposes. While this position remains consistent with prior years, they are not receiving any benefit from the NIC cuts made by Mr Hunt and are in fact seeing an increase in the weekly rate of Class 2 NIC to £3.70 (from £3.45).
- With Income Tax rates remaining frozen until 2027/28 and continued inflation (albeit now halved, as we were reminded), most taxpayers will still feel the impact of fiscal drag and will be considerably worse off irrespective of the NIC reductions.
- In a similar way, the thresholds for the clawback of child-benefit have remained at the same level, and again with inflation (including on wages) an increased number of people will be caught by this provision.There was significant rumour in the build up to the Budget regarding a possible reduction in, or even a complete abolishment of, Inheritance Tax. However, the Chancellor made no mention of this in his speech, and the rate remains at 40%.
Would you like to know more?
If you have any questions about the Government’s Autumn Statement and how it may impact you, please get in touch with your usual Blick Rothenberg contact, or Jonathan Barratt using the details on this page.
For any media enquiries, please contact David Barzilay.
You can also visit our Autumn Budget Hub, where you can find our commentary and a range of insights to help you better understand how the Autumn Statement may affect you.