On 22nd November, Chancellor Jeremy Hunt made his Autumn Statement to Parliament – and despite the challenges of the past three years there were positives in it for businesses.

But much of this upside also requires preparation on your part, so here’s our overview of what you need to know, the changes and the continuities you should expect, how you will benefit from them, and what you will need to do to ensure you don’t miss out.

Self-employed? You’ll probably pay less 

If you’re a sole trader, or otherwise self-employed – as a consultant, for example - you’ll benefit from a cut to the main rate of Class 4 self-employed National Insurance Contributions (NICs) from 9% to 8% from 6‌‌‌ April‌‌‌‌‌‌ 2024. This is worth about £350 for a person on average self-employed earnings but could of course equate to much more.

It has also been announced that no one will be required to pay Class 2 self-employed NICs from 6‌‌‌ April‌‌‌ 2024. 

The reductions are profit-dependent, but in all cases access to contributory benefits (state pension, for example) is preserved and, in some instances, improved.

It makes sense for you to start doing some sums right now to understand how these changes will improve your financial situation, and to decide how you are going to put the savings, however modest, to best use. 

Do you reinvest them in your business? Invest them elsewhere? Or put them towards activities that could help to grow, rather than just sustain, your business – business coaching, for example, or mentoring?

To help you decide, more detail is available on the Government’s National Insurance Factsheet here. 

More power and quicker planning decisions

Energy prices have been a worry for many businesses for some time now, so the Government’s commitment to cut grid access delays by 90%, and to reduce the windfall tax for new renewable projects, is good news.

It’s likely to improve access to electricity for businesses whose premises or operations are expanding, and new businesses eyeing new-build premises. Plus, it’s intended to bring down the overall cost of electricity for allbusinesses, and this is something you’ll need to factor into your forecasts going forward.

On the planning front, if your business supplies the major projects or infrastructure sector, you could well see business accelerate over the coming months and years, as the Government has brought forward plans for authorities to offer guaranteed accelerated decision dates for major developments.

Again, it’s important to try and understand the positive effects of these changes early, to have a business plan in place so that you don’t miss the boat, and engaging with a business coach now will certainly be an effective start to this process.

Capital Allowances: full expenses now permanent

The cost of buying plant, machinery, and even office equipment like desks, effectively came down in the Statement, as the Chancellor announced that “full-expense” Capital Allowances would now not be discontinued in March 2026, and would instead continue indefinitely. 

This means you can continue to claim a 100% first-year allowance for main rate expenditure, and a 50% first-year allowance for special rate expenditure, reducing your tax liability correspondingly.

This means, essentially, that you can invest more easily and more economically in equipment and other purchases that will support your business’s growth. 

But greater investment and increased growth both require a strong business plan, to ensure spend delivers appropriate returns, so it’s critical that you start working with skilled business advisers now to get ahead of the curve and make the most of the new opportunities.

R&D gets a boost 

For businesses with a significant Research and Development (R&D) function, tax relief enhancements have also now come into force.

These include providing a higher rate of payable tax credit for eligible SMEs. Loss-making companies claiming the existing SME tax relief will be eligible for a higher payable credit rate of 14.5% if eligible.

In reality, this is not a simple topic; much turns on the definition of what is and isn’t an “R&D-intensive” company, and also on accounting timings. So, it’s worth both checking out the detail and seeking help from a business specialist to help you plan and structure the business to maximise the R&D “perks” going forward.

Higher costs, but a happier workforce  

If your business has employees, they’ll be getting help with the ever-spiralling cost of living in the form of reductions in National Insurance contributions, and increases in the statutory minimum wages.

From 1‌‌‌ April‌‌‌ 2024, the National Living Wage will increase by 9.8% to £11.44 an hour for eligible workers across the UK aged 21 and over. The earnings of young people and apprentices on the National Minimum Wage will also increase to £6.40 an hour.

Clearly, wage rises mean higher costs for many businesses, but the prospect of better earnings may help you to hold on to vital talent in a highly competitive market – a constant challenge that a business coach can also help you tackle.

What you need to do

Some technical changes will be necessary as a result of the Autumn Statement, and you need to get onto these quickly. 

If you have employees, you’ll need to consult with your payroll company or payroll software provider, and where applicable your IT service provider, to get ready to implement the change to Class 1 employee NICs (down from 12% to 10%) that comes into effect from 6‌‌‌ January 2024. 

If you have apprentices or workers eligible for National Living Wage or National Minimum wage on your staff, you’ll have to update their pay too.

But more strategically, it’s also important that you take a look at your business as a whole, and how the changes and opportunities the Autumn Statement presents need to be reflected in planning, objectives, and day-to-day operational improvements.

And for this, we at Lesley Jones stand ready to help you get started.