Martin Bennison, Sales and Marketing Director discusses our view on the Autumn Statment.
Following the Chancellors Autumn Statement last week, we were pleased that he has responded to business sentiment and calls to focus on helping to boost business confidence and investment to support UK business growth.
Against the backdrop of an improving landscape, with inflation continuing its downward trajectory and interest rates seemingly having reached their peak, the Chancellor laid out a total of 110 measures as part of his quest to boost economic growth.
Hopefully, UK businesses who have been reticent to invest in growth over recent times will feel a sense of renewed confidence and certainty to invest in their business growth based on the measures introduced primarily:
- Making the full expensing of investment in qualifying plant and machinery permanent is a boost for firms needing to invest to support growth. It removes the uncertainty around the scheme and allows firms to plan forward.
- The provision of £4.5 billion to support strategic manufacturing sectors such as automotive, aerospace, life sciences and clean energy from 2025 for five years will help support the creation of jobs in the UK
- Continuing business rates relief for hospitality, retail, and leisure will help to reduce the cashflow drain on these businesses who have, and continue to face, challenging times
- Plans to support people back into work is welcomed to help firms find the talent they desperately need to continue operating effectively and invest in growth.
- Freeports and Investment Zones - Both regimes allow businesses in specific locations to benefit from a number of reliefs, including Stamp Duty Land Tax relief, enhanced capital allowances, structures and buildings allowances and secondary Class 1 NIC relief for eligible employers. Both regimes were originally to run for five years but the Chancellor has announced that they will both now run for ten years.
- Making late payment unacceptable - from April 2024, firms bidding for government contracts over £5 million will have to demonstrate that they pay their own invoices within an average of 55 days, tightening to 45 days in April 2025 and then 30 days in future years.
- The NIC cuts were a definite crowd pleaser for employees, as was the increase in the National Living Wage which supports employees but will increase the payroll burden for some firms.
- As muted prior to the statement, there were no changes to Corporation Tax or VAT levels.
The Chancellor still has work to do but this statement is positive news for the UK economy. I suspect we will see further measures introduced in the Spring around Inheritance Tax and Capital Gains Tax