The dust has settled after the big reveal of the Autumn Statement, and we bet you’re still trying to figure out what it all means for your small business. Don’t worry; we’ve got your back.
We’ve sifted through the financial jargon and boiled it down to the nitty-gritty details that matter most to small and medium-sized enterprises (SMEs) like yours.
Tax relief galore
Let’s kick things off with everyone’s favourite topic – taxes! The Autumn Statement brings some good news in the form of tax relief for small businesses.
Firstly, Chancellor Jeremy Hunt has decided to make the new full expensing scheme a permanent fixture of the tax system. So if you’ve been eyeing some shiny new equipment or planning to upgrade your tech game, now might be the time to strike while the iron is hot.
What’s more, two million self-employed businesses will see a reduction in their Class 4 National Insurance contributions (NICs) in April, while Class 4 NICs will be abolished altogether. According to Hunt, the average self-employed individual will save £350 a year as a result of these changes.
Effects on employers
If you’re planning to expand your team, you may want to pay attention to the Government’s new ‘back to work plan’. Hunt focused much of his Autumn Statement on measures to incentivise more people to rejoin the workforce, offering support in key areas to help people stay in employment and get the economy moving.
However, other announcements mean that many employers will soon face higher costs and a greater administrative burden. The Government’s decision to cut the main rate of employee National Insurance from 6 January 2024, for example, means employers will need to make changes to their payroll system earlier than expected.
The upcoming increase to the National Living Wage from £10.42 to £11.44 an hour could also put a financial strain on small SMEs, as staff costs are often one of the biggest business expenses for employers.
Making Tax Digital
Following concerns from accounting professionals about the Making Tax Digital for income tax self-assessment (MTD for ITSA) timeline, the Autumn Statement confirmed that MTD rules will not yet apply to self-employed people and landlords making less than £30,000 a year.
The details are still a bit hazy, however, so it’s essential to stay informed and be prepared for potential changes in the tax landscape.
The Government also decided to simplify MTD for ITSA by removing the requirement for taxpayers to submit an end-of-period statement each year.
Navigating the maze of business rates
In an effort to make the business rates system fairer and more reflective of the current economic landscape, the Chancellor unveiled a £4.3bn business rates support package.
The measures, which will roll out over a five-year period, are a ray of hope for businesses grappling with hefty business rates bills.
Hunt’s decision to freeze the small business multiplier for the fourth year in a row will provide more support for many SMEs as they struggle with high operational costs.
High streets have also taken a beating in recent times, and the Autumn Statement acknowledges the struggles faced by local businesses. As a result, many firms will also welcome the extension to the 75% Retail, Hospitality and Leisure relief, which will now apply for an extra 12 months.
In conclusion
There you have it, folks – a snapshot of what the 2023 Autumn Statement means for SMEs. We know navigating the changes isn’t always a walk in the park, but we hope this rundown has shed some light on some of the key measures.
As always, it’s crucial to consult with your accountant to understand how the Autumn Statement 2023 affects your unique business.
Remember, running a small firm isn’t just about numbers and policies; it’s about the people who make businesses thrive. So, whether you’re seeking tax relief, managing your payroll, or just trying to survive on the high street, we’re here to help you make sense of it all.
Get in touch with us to discuss these changes.