Newsletter - Autumn Statement
The Chancellor has issued his Autumn mini budget, constrained by limited economic growth, post covid borrowing and the highest tax burden since WW2, there are few options.
We welcome the increase in minimum wage of 10%. However, the impact will be felt in the hospitality and leisure sector. Already our clients are preparing price increases to cover this, adding to inflationary pressure.
Sole traders will benefit from Class 2 and 4 changes by up to £500 p.a. The big winfor employees is Class 1, up to £754 p.a.
There is nothing new for business owners / employers, Corporation tax remains at 25% headline rate, Employers NI remains at 13.8%.
National Insurance changes
For owners and directors of Limited Companies the changes to NIC hasn’t changedmuch, but they will effect other people in your business.
A reduction in employee Class 1 NIC rate from 12% to 10% payable on earningsbetween £12,570 and £50,270, effective 6 January 2024. Increasing youremployees take home pay, and you pay no more
For self-employed/soletraders – Class 2 NICs abolished, effective 6 April 2024
For self-employed/soletraders – Class 4 NIC rate reduced from 9% to 8%charged on profits between £12,570 and £50,270, effective 6 April 2024
But no change to National Insurance thresholds
Self Assessment
No need for a self-assessment if earning above £150,000 (required currently) and all income is taxed through PAYE, effective for 2024/2025.
Investment Allowance
Businesses may claim up to £1 million pounds standard accelerated investmentallowance. The changes made to full expensing will apply above this amount.
National living/minimum wage increase in April 2024
Maintaining minimum wage with inflation is a must. With no change in the personalallowance the increase may push people over the £12,570 personal allowance, onevery £100 of pay over £12,570 there will be £30 PAYE and NI and £14 of employersNI. A 44% return for the government, and inflation to boot.
The National Living Wage will increase to £11.44 an hour an increase of £1.02.
The new wage will apply to 21-22 year olds an increase from £10.18 to £11.44, a 12.5%increase. The National Minimum Wage for 18-20 year olds will increase from £7.49to £8.60, a 14.8% increase.
December Payroll
If we do your payroll we will need your December payroll information by the 19th to ensure we can process before the Christmas break.
If you would like to pay your employees early please provide the information at least 2 days before you wish to pay them.
Important Dates
31st January: Self Assessment payment due
9 Months after your EOY: Corporation Tax is due for payment
