Jeremy Hunt has presented his Autumn Statement, including changes to the National Living Wage, cuts to employee National Insurance and business rate relief.
Read some of the key points below.
Changes To National Living Wage
The Chancellor has confirmed that the National Living Wage will rise to £11.44 per hour from April 2024.
The National Living Wage has increased by £1.02 per hour, based on recommendations from the Low Pay Commission.
The National Living Wage will now also apply to 21- and 22-year-old workers for the first time. It previously only applied to those 23 or older. The minimum wage for those aged between 16 and 20, as well as apprentices, has also increased.
The annual increases to the minimum wage and national living wage with effect from 1st April 2024 are:
- 21-year-olds and over – £11.44 (increase of £1.02)
- 18- to 20-year-olds – £8.60 (increase of £1.11)
- 16- to 17-year-olds and apprentices – £6.40 (increase of £1.12)
Business Rate Relief
The Chancellor has also announced some business rates relief for SMEs. The 75% business rates relief for the hospitality, retail and leisure sectors has been extended for a year.
As well as this, Mr Hunt announced that the planned increase in the small business rates multiplier will not be going ahead this year.
National Insurance Cuts
National Insurance Contributions for employees will be cut from 12% to 10%, aiming to improve employee pay packets. This change will come into effect from January 6th, 2024.
Apprenticeship Investment in Certain Sectors
The Chancellor has announced plans to stimulate apprenticeship training in engineering and other growth sectors, through a two-year apprenticeship ‘growth sector pilot’. This scheme includes £50m of funding, with the aims to increase the number of apprentices in key growth areas.
Capital Expensing Made Permanent
It was also confirmed that the full expensing system for businesses, originally brought in as a temporary measure, will be made permanent. This scheme allows businesses to offset spending on machinery, plant and IT equipment against their taxable profits.
Single Lifetime Pension Pot Reforms
The Chancellor has stated plans to consult on a “one pension pot for life” scheme. This would enable employees to request new employers to contribute their pension payments into their existing pension pot.
Under the current rule, each business tends to have a defined scheme that all employees pay into. These changes could mean that employers are required to pay into different pension pots for different employees.
Tax Relief for Freeports and Investment Zones
Finally, plans were announced to extend the existing Investment Zones programme and freeport tax reliefs from 5 years to 10 years. Additionally, a £150m investment fund will be made available to support the programme and secure business investment opportunities. Alongside the existing zones, four new zones in Greater Manchester, Wales, the West Midlands and the East Midlands have been announced.
If you require further advice and guidance on how these changes will impact your business, please get in touch with your local HR Dept office.