Autumn Budget - An Overview
With all the changes in the last few months at the top level of politics, it’s unsurprising to see so many changes being made in quick succession.
The current chancellor, Jeremy Hunt, has laid out his first budget. We take a look at some of the key points which may affect your company.
National Living Wage Increase
As of April, over-23s will have to be paid at least £10.42 per hour, an increase of £0.92 per hour (from £9.50 per hour).
An increase in minimum wage usually takes place twice a year - once in April, and again in October.
So an announcement of an increase here shouldn’t come as a shock. But it does give you a head start on planning how things may look come April 2023.
Income Tax Personal Allowance Thresholds
Income Tax Personal Allowance thresholds will be maintained, resulting in more tax being paid as wages increase.
The Chancellor has announced that the current levels of income tax personal allowance, higher tax threshold, main national insurance and others, will be frozen for a longer period.
They were previously frozen until 2026, but this has been extended to April 2028.
In short, if pay increases, more of it will now fall into the bracket above the threshold, resulting in more tax being paid.
Energy firms will now have a windfall tax of 35%, up from 25%. This is in place until March 2028, starting from 1st January 2023.
It doesn’t matter what industry you’re in, there’s no doubt you’re aware of the energy prices at the moment. So it shouldn’t come as too much of a surprise that energy companies are going to be taxed this way.
The Chancellor has made it clear that this should be temporary, however, and only on windfall profits.
To sit with this, a temporary 45% levy on electricity generators has also been introduced.
Energy bills will likely increase in April 2023
The support towards energy bills will be extended but it’s likely to be less generous than what’s currently in place.
It’s predicted that a typical household will pay around £3,000 annually, an increase from £2,500.
While this is mentioned in the scope of households, any increase in energy is likely to prove to be a burden for any organisation, whether that’s their own energy, or supporting their staff through difficult times.
Electric vehicles will no longer be exempt from Vehicle Excise Duty (“road tax”) from April 2025.
In a bid to make the Vehicle Excise Duty system fairer, electric vehicles will no longer be eligible for the exemption starting in April 2025.
Many businesses and individuals have made the switch to electric vehicles, not only in a bid to cut costs in some ways, but also to take advantage of tax incentives and project a “green” image for their business.
It’s likely that this will come as a bit of a blow to some.
Working Hours and Earnings
Over 600,000 people on Universal Credit will be asked to meet with work coaches to help increase their work hours or earnings.
Jeremy Hunt has stated that he’s committed to helping people increase their income and to become financially independent.
As a result, it’s been proposed that more people will be asked to meet with work coaches, who will support them with increasing their working hours (and therefore, earnings).
Some claim this could help solve the challenges faced by the country, others argue it’s pushing it further into trouble.
However you look at the budget, these measures affect millions of people up and down the country. Even if you’re not directly affected, it’s likely to have an impact on your staff or someone you know.
But with some of these measures not coming into place until next year, this does give businesses a chance to prepare.
- 22 Nov 2023 - Autumn Statement 2023 - What does it mean for businesses?
- 15 Nov 2023 - Succession Planning: How To Pass The Torch In Your Business
- 02 Nov 2023 - What Is A Company’s Registered Address?
- 13 Oct 2023 - 3 Top Tips For Successfully Setting Up A Company
- 25 Sep 2023 - How Do You Define a Business’ Vision?