Autumn statement reaction from Croner-i

London, England. 16 November 2023 - Ben Chaplin, MD at Croner-i, shares his reaction to the Chancellor's Autumn Statement.

“Many businesses will be indifferent to today’s announcements. There are some good incentives around investment (if they have the profits to invest), and good news on some of the rate reliefs offered for the high street and hospitality, but then you’ve got the minimum wage increase and the impact of measures like employees controlling where their employer’s pension contributions are paid, which could be quite an administrative burden.

“The tax reliefs are a positive, but we’ve seen HMRC opening a lot of enquiries into claims for things such as R&D tax credits. So for businesses to access the full relief they’re likely to need to seek professional advice.

“Many SMEs will also be impacted by enforced wage rises and potential administrative challenges around employer pension contributions, although we’ll need to see more detail on this to know what it entails in reality.

“The widening gap in National Insurance contributions between employees and those who are self-employed is likely to increase status disputes, especially for those working in the gig economy. As we’ve seen in recent days with the Supreme Court ruling that Deliveroo drivers are not employees, this issue is one that will continue to rumble on as people seek to clarify employment status. Combine this with IR35, another area that SME’s need to be wary of and HRMC is keen to enquire into, and we’re likely to be talking about this for some time to come.

“Cutting the main rate of national insurance from 12% to 2% does give some respite for workers, but does it really stimulate the economy or just ease the pain caused by rising prices and interest rates? That remains to be seen.

“Overall this appears a positive set of announcements for all, but are they enough to really make a difference? It's that fine balance of giving too much given the economic position and national debt, having said that, the government will have seen a boost to tax coffers given rising prices and wages which has allowed them to give some of that back. Individuals are still however carrying a significant tax burden, but hopefully this sets us on a path to reduce that. Is he leaving the path open to some more headline grabbing tax cuts next April? I would think so.”

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