The UK Treasury has unveiled its Autumn Statement, with headlines including a fall in National Insurance, higher minimum wage, and new investments in artificial intelligence.
Key changes in Autumn Statement 2023
- National Insurance employee contributions cut from 12% to 10%, taking effect on 6th January 2024.
- National Living Wage increased to £11.44 an hour from April 2024; and will apply to workers aged 21 and over.
- Universal credit and disability benefits to increase by 6.7%, in line with September inflation
- State pension to rise by 8.5% from April 2024 to £221.20 a week, as triple lock remains.
- Welfare recipients unable to find work within 18 months must undertake work experience. Any not seeking work for a six-month period will lose benefits.
- Full-expensing, which allows plant and machinery investment to be offset against tax, made permanent.
The Government view
Aimed at building a stronger and more resilient economy, the Chancellor set out a plan to unlock growth and productivity by boosting business investment by £20 billion a year, getting more people into work, and cutting tax for 29 million workers – the biggest tax cut on work since the 1980s.”Autumn Statement notice (Gov.uk)
The Zellis view
“The Autumn Statement’s combination of business tax cuts and investments in AI innovation centres offers an opportunity for forward-thinking companies to raise their technology game. We set up a new Zellis AI Labs team back in April this year and hopefully this will encourage other companies to seize the opportunities presented by artificial intelligence as one way to level up the disappointing UK growth projections.”John Petter, CEO, Zellis
“Employees across the UK will welcome the fall in National Insurance in the Autumn Statement, which will boost financial wellbeing. As the UK market leader in payroll, our customers – and the 5 million people that depend on us – can be confident that we’re ready to implement this, and the National Living Wage changes, as soon as the legislation passes.”Abigail Vaughan, Chief Operating Officer, Zellis
The increase in the National Living Wage (NLW) to £11.44 per hour, as well as the drop in eligibility to 21 years of age, is welcome news that also adheres to the recommended deadline set out in the Low Pay Commission Report.
The question on everyone’s lips now is, will the economic climate allow for this? The 2% cut in the main rate of NI – something that businesses will need to process from 6th January – will provide some relief, but without any wider cuts to corporation tax across the board, how will businesses find the extra capital needed to meet this rise in the NLW? That remains to be seen – and especially because many, if not most, UK companies have already done their budgeting for 2024, and are unlikely to have accounted for such a substantial hike in the NLW.”Cybill Watkins, Product Legislation Manager, Zellis