On 22nd November, Jeremy Hunt announced the governments tax and spending plans for the year ahead which included measures to help grow the economy, raising business investment, getting more people into work, and reducing inflation next year.
There were several significant announcements relating to business and employment from the Chancellors Autumn statement :
1.) There will be an increase to the statutory minimum wage rates from 1st April 2024.
The national living wage (the top rate of the national minimum wage) is extended to apply to workers aged 21 and over (before 1 April 2024, the top rate applies to those aged 23 and over).
The rates will be as follows:
- For workers aged 21 or over, the rate will increase by £1.02 to £11.44 per hour (the national living wage).
- For workers aged at least 18 but under 21, the rate will increase to £8.60 per hour.
- For workers aged 16 to 17 and apprentices, the rate will increase by £1.12 to £6.40 per hour.
2.) Getting people back to work – mandatory work placements
- People who are receiving state benefits will be required to participate in a mandatory work placement if they have not found employment after 18 months. If they do not engage in the process to look for work then after six months, their benefits will cease.
- It is part of the new plans to get people back to work, which will see an extra £2.5bn spent on career support.
3.) National Insurance Cuts
Employee class 1 National Insurance Contributions will reduce from 12% to 10%, from 6 January 2024.
4.) Business Rate Relief
Some business rates relief was also announced for SMEs. The 75% discount for business rates for the hospitality, leisure and retail sectors has been extended for another year.
It was also confirmed that the temporary tax break that is in place which allows businesses to offset the full cost of spending on IT, machinery and equipment from their taxable profits, will be made permanent.
5.) Pension Changes
The Chancellor announced plans to consult on a ‘One pension pot’ for life. This would allow employees to request that their employers contribute pension payments into their existing pension, thereby giving them one portable pension pot.
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