We now have further clarity on the Government’s fiscal policy going into 2023 which will now enable businesses to finalise their 2023/24 budgets. The Chancellor of the Exchequer set out in the Autumn budget the following changes regarding business and managing people:
- The National Living Wage, which is in place for all workers over 23 years of age will increase by 9.7% to £10.42 per hour. It is estimated that this will benefit over two million people. It was also confirmed that a substantial boost will also be made to the national minimum wage (for those between at least school leaving age and 23 years). For those aged between 21-22 their rate will increase to £10.18 per hour, for 18-20 year old’s, their rate will increase to £7.49 per hour and the rate for apprentices and those between 16-17 years will increase to £5.28.
- Those receiving universal credit will see their benefit increase in line with inflation. The latest statistics show that 5.8 million people are on universal credit, with 41% of them being in employment.
- Employees will continue to receive a personal allowance in respect of income tax of £12,570 however, it will now be fixed for a further two years, up until April 2028.
- The national insurance thresholds will not change, with the current rates remaining set for a further two years, up until April 2028.
- The higher-level tax rate of 45% for those earning more than £150,000 each year remains in place; however, the threshold will be lowered so that those earning £125,140 will now be included. It is estimated that a further 250,000 people will be brought into this higher-level tax rate.
- The employment allowance that allows employers to reduce their annual national insurance liability by up to £,5000 each year will remain the same.
- Owners of electric cars and vans will be required to pay vehicle tax from 2025.
- From 1 April 2023 business rates will be updated because there has not been an evaluation of changes in property values since 2017.
- If a business loses its eligibility for small business rates relief because of the re-evaluation, then any bill increase will be capped at £600 per year from April 2023
- Business rates relief for those operating in retail, hospitality and leisure will increase from 50% to 75% (up to £110,000 per business) in 2023/24.
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If you have questions surrounding the Autumn Budget and how it impacts your employees, we can support with that through our HR or Payroll services. The cost of living crisis poses multiple challenges for employers, rest assured your business will be in safe hands with our expert team.