Autumn Statement Business Impacts
A 2% cut in employees’ NI was the key headline from the Autumn
Statement. How does this affect your business and how will other key changes announced impact you?
Impact of 2% cut in employees’ NI.
The 2% cut in employees’ NI won’t save your company any money as the employers’ NI rate remains the same at 13.8%. However, your company will be impacted by the change as you need to ensure that your payroll software is updated before 6 January 2024 when the change takes effect.
Full expensing made permanent.
Full expensing was introduced in April 2023 to replace the super deduction for businesses. It was only intended to last three years but will now remain in place for the foreseeable future. Full expensing means that the amount you invest in new qualifying plant or machinery, such as IT equipment and vans, can be deducted in full and immediately from your company’s profits so it can save 19%/26.5%25% tax depending on its marginal corporation tax rate.
Impact.
Full expensing will only be a benefit to your company if you are looking to spend more than £1m on qualifying assets in a year.
Tip. It only applies to new plant and machinery but if you buy second-hand assets, you can still get 100% tax relief on up to £1m of assets by claiming the annual investment allowance.
Small business rates multiplier frozen.
For 2024/25, the small business multiplier in England is to be frozen for a fourth consecutive year at 49.9p.
Impact. If your business premises has a rateable value of less than £51,000, this is good news. But it’s not good news if you have a rateable value of £51,000 or more as the standard business multiplier will be increased by 6.7% in line with inflation to 54.6p so you’ll need to factor the increase into your forecasts.
New measures to tackle late payments.
From April 2024, companies with a turnover of £5 million or more will be banned from bidding for public contracts if they have a record of paying their suppliers after 55 days or more. After a year, this will decrease to banning those who pay over 45 days, reducing to 30 days the year after, in line with the Prompt Payment Code.
Impact.
If you are a company which have contracts to supply the government, then your customers will have to start paying you within 30 days.
The 2% cut in employees’ NI won’t affect the cost of employing staff. Permanent full expensing will only affect you if you have an annual capital spend of more than £1m. If you have customers that supply the government, the new measures to tackle late payments should mean you get paid faster