Jeremy Hunt unveiled a £20bn "autumn statement for growth," featuring a larger-than-expected cut in National Insurance and tax reductions for businesses.
Hunt has also announced a widely anticipated decision to make permanent “full expensing” for businesses. For every £1 that a business invests in IT, machinery and equipment, they can claim back 25p in corporation tax. This not only positions businesses for growth but also empowers them to make substantial returns on their investments. Click the link to learn everything you need to know on Asset Finance and how you purchase the equipment you need at the lowest rates.
Companies can do this in one go as opposed to having to offset the cost against corporation tax over a longer period. If you are a company that invests heavily in equipment, such as manufacturers then this is a huge benefit for you. Please note however that companies which aren't profitable, or which mainly invest in people and equipment, won't benefit as much.
Jeremy Hunt says this will cost £11bn a year and represents the "largest business tax cut in modern British history". "It means we have not just the lowest headline corporation tax rate in the G7 but its most generous capital allowances," he adds.
The chancellor emphasised a shift toward reducing debt, cutting taxes, and rewarding work, despite projections of sluggish economic growth and real-term spending cuts. The announced 2p reduction in national insurance is expected to save the average worker £450 annually, with an additional cut for the self-employed worth £350 a year. Overall tax levels will rise due to frozen tax thresholds, offsetting only a quarter of previous tax increases. The government plans a 1% annual increase in day-to-day spending for six years and a freeze on cash terms for investment.
The chancellor addressed the cost of living crisis, sharing revised economic forecasts for the post-Covid and energy challenges era. The 2024 growth estimates were adjusted down from 1.8% to 0.7%, mainly due to higher-than-expected inflation. Hunt introduced 110 measures to boost business spending, like faster planning approvals, manufacturing subsidies, and new investment zones. The plan also helps the self-employed, eliminating class 2 national insurance for almost 2 million individuals and providing small firms with a £4.3bn tax break by freezing business rates.
If you're a business owner who is thinking about utilising the new opportunity to invest in new assets for your business or would like to discuss your finance requirements, don’t hesitate to contact a member of our team. Reach us by phone at 01908 429888, email us at firstname.lastname@example.org, or access our comprehensive finance guide PDF for further insights through the link below: