The Autumn Statement Newsletter Part 1

Last week, on the 22nd of November, the Chancellor of the Exchequer, Jeremy Hunt delivered the governments Autumn Statement to the nation.?

It was an interesting speech with a number of areas reviewed, many of which impact payroll. However, prior to the speech, given the current “state of the nation” and the on-going cost of living crisis there was a lot of conjecture around the announcements to be made which in the end focused on further support to affected industries still feeling the effect of COVID-19 and further support to those in work.

Before we look at the changes made, it’s important to understand what will remain the same due to confirmation from the speech.

Taxation

As announced in the previous March budget, then updated in the Autumn statement 2022, the freeze on the personal allowance and base rate limit due to last until at least April 2026 will now remain until April 2028 and there was not change to those earlier decisions.? There ha been a number of statements since, that changes to taxation are not off the cards, and given a further budget is due in March prior to a possible election later in the year, we certainly can’t guarantee that this freeze will remain. The same freeze or a reduction also currently applies to the inheritance tax threshold, and the Annual Exempt Amount for Capital Gains Tax.

• The personal allowance and base rate limit will therefore remain unchanged and the un-devolved personal allowance tax code of 1257L therefore continue from 2022/23
• The base rate limit also remains at ￡50,270 (including the personal allowance)
• The additional rate (higher) limit of ￡150,000 was reduced from the 6th of April 2023 to ￡125,140 and again, this will remain in place.

There have been confirmed increases to the marries allowance and blind persons allowance and these are shown in the chart below:

Due to the freeze, we’re therefore able to confirm tax rates and thresholds in England and Northern Ireland will remain unchanged for 2024/25 but with budget announcements still due in Wales and Scotland due to WRIT and Sit in each nation, we await confirmation of the rates and thresholds for the two fully devolved governments which can be expected imminently.

National Insurance

Again, through the pre-confirmed freeze, National Insurance thresholds will remain unchanged for 2024/25 including the tax alignment on the Primary Threshold.? The only alteration is the inclusion of the new Upper Secondary threshold linked to the Investment Zone relief, and this can be seen along with all NI thresholds below:

Pensions

An area that saw considerable change and will do so over the coming 24 months is pensions.? With he Auto-enrolment changes along with he pensions dashboard both still to come, it’s going to be a busy time coming up in these areas especially, along with the associated cost to employers.? Currently, possibly due to the changes due, we have seen little change announced and an expectation that areas such as deduction levels and triggers are likely to remain unchanged again this year, and as such the Qualifying Earnings Bands, although not yet announced will remain at the levels below, along with the changes to annual and lifetime limits amended and confirm previously: