Chancellor Jeremy Hunt has unveiled the government’s tax and spending plans, and forecasts for the economy this lunchtime (22.11.23) we take a look at the facts and how they affect businesses in Dorset.
Announcements in the Chancellor’s Autumn Statement which affect small businesses include:
National Insurance
- Class 2 National Insurance contributions (NICs), which are the flat-rate contributions paid by self-employed people earning more than £12,570, will be abolished from April 2024. This will not affect access to contributory benefits, including the state pension.
- From April 2024, the rate of Class 4 NICs on all self-employed earnings between £12,570 and £50,270 will reduce from 9% to 8%.
- In 2024, the Government will set out next steps on Class 2 NICs reforms. This will include how self-employed people who have profits under £6,725 and pay Class 2 NICs voluntarily will continue to build up National Insurance credits.
- Employee NICs will be cut from 12% to 10% from 6 January 2024.
Business rates
- In 2024/25 the small business multiplier for business rates will be frozen at the current rate.
- Business rates relief for the retail, hospitality and leisure sectors will continue in 2024/25. This will provide businesses with a 75% reduction in their business rates.
Tax and investment
- From April 2024 the R&D Expenditure Credit and the Small and Medium Enterprise Scheme will be merged to help simplify the system and increase innovation.
- Tax reliefs for Investment Zones and Freeports will be extended from five years to ten years. A £150 million Investment Opportunity Fund will also support Investment Zones and Freeports to secure specific business investment opportunities.
- The Enterprise Investment Scheme and Venture Capital Trusts will be extended until 2035.
Dorchester Chamber for Business President Steve Bulley said: “This has been billed as a Autumn Statement for business and we welcome the continuation in business rate relief for the hospitality industry and the freeze the small business multiplier. The R&D Expenditure Credit will unlock stifled investment within Dorset.
“The removal of class 2 national insurance payments for the self employed will also be welcomed by the growing number of local people working for themselves. However for many of our small business members the increase in the minimum wage to £11.44 for over 21 year olds, although welcome, will add an extra financial burden.”
Reacting to Chancellor’s Autumn Statement, Shevaun Haviland, Director General of the BCC, said: “We are pleased the Chancellor has listened to our calls to help businesses deal with the current economic challenges. Our Chamber network called on Jeremy Hunt to offer ‘much needed solutions to Britain’s investment problem’.
“Today’s statement provided some welcome remedies at a time when businesses of all sizes need certainty and security from the Government in the difficult months ahead.”
The Autumn Statement is available in full at:
https://www.gov.uk/government/publications/autumn-statement-2023
With around 100 members any business in Dorset with less than 30 employees can join Dorchester Chamber for business for £60p/a (no VAT).
