Ahead of the Autumn Statement, the eyes and ears of the UK public were keenly focused on one man on 17th November 2022 as Jeremy Hunt, Chancellor of the Exchequer, announced his first budget since assuming the role a mere four weeks earlier.
Following the fallout of September 2022’s mini budget, delivered by the now former Chancellor, Kwasi Kwarteng, businesses across the country were naturally intrigued to see how the new government would tackle the huge black hole in the UK’s economy, and what impact the the new measures would have on them.
So, what does the outlook for the next six months look like? Is the planned business rates increase going ahead? And is the national living wage increasing?
Following correspondence from our customers, we have handpicked and answered some of their key burning questions below.
Many of my staff are currently paid the National Living Wage, are rises expected?
The Chancellor has announced that he would accept the recommendations from the Low Pay Commission to increase the national minimum wage by 9.7% for those aged 23 and over from April 2023.
The increase is will cost businesses an additional £1,600 per year, per full time worker.
For those employing a predominantly younger workforce, the increases are:
- £9.18 to £10.18 for people aged 21 to 22.
- £6.83 to £7.49 for those aged 18 to 20.
- £4.81 to £5.28 for under 18s and apprentices.
Ahead of implementation, it’s important you calculate the long-term changes the Autumn Statement will have on your payroll.
Are business rates still increasing?
Many of our customers were naturally concerned at the potential increase in business rates due to soaring inflation. However, one of the biggest headlines was the confirmation of the business rates multiplier being frozen for another year.
The Treasury forecast that due to the freeze, the total increase in business rates bills will be less than 1%, compared to over 20% without the intervention.
Support for eligible retail, hospitality, and leisure businesses is also being extended and increased from 50% to 75%. This includes business rates relief of up to £110,000 per business in 2023-24. Around 230,000 properties will be eligible to receive this increased support in a package worth £2.1 billion.
Moving forward, the Chancellor announced the government will go ahead with a revaluation of properties for business rates in April 2023. They insisted that additional relief will be provided to support businesses facing large bill increases following the revaluation.
Did the Autumn Statement include whether the Energy Bill Relief Scheme will be extended?
Frustratingly, the government provided no updates on the Energy Bill Relief Scheme. In a brief reference to the scheme, the Chancellor announced that further information would be provided in due course.
We will continue to monitor the situation and communicate with our customer base once clarification is provided.
Is it true that Research & Development (R&D) funding is being cut?
Despite recent speculation to the contrary, the government have in fact done the opposite and announced an increase in R&D funding to £20bn by 2024-25.
This package includes reforms to R&D tax reliefs, a mixed bag of results depending on the size of your business. For expenditure on or after 1 April 2023, the R&D Expenditure Credit (RDEC) rate will increase from 13% to 20%. The small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86%, and the SME credit rate will decrease from 14.5% to 10%.
R&D tax credits can be confusing at the best of times, never mind following large-scale changes. If you’re confused about how the changes impact you, get in touch with our team.
Find Out More about the Autumn Statement
The complexities of what the new budget means for UK businesses runs deep. It’s natural to take some time out and absorb the new announcements before analysing the impacts they will have on your business.
If you have any concerns over the new measures or are simply looking for clarity on your running costs and budgetary apprehensions for next year, feel free to contact us on 0800 130 3514.
For more dedicated business-tailored content, please feel free to visit our Advice Hub.