After the dramatic events of the Autumn Statement in 2022 and, with an election looming in 2024, we were unsure of whether this Autumn Statement would provide us with much to say.

However, there is always something to say about tax and below is the summary.

Income tax rates

The government has stated that the basic rate will remain at 20%, the higher rate at 40% and the additional rate at 45% for 2024/25.

The government reduced the point at which individuals pay the additional rate of 45% from £150,000 to £125,140 for the current tax year and this will continue for 2024/25.

Income tax allowances

The income tax personal allowance and basic rate limit are fixed at their current levels until April 2028. They are £12,570 and £37,700 respectively. For those entitled to a full personal allowance, the point at which they will pay income tax at the higher rate will continue at £50,270.

Dividends

The government has also confirmed that, from 6 April 2024, the rates of taxation on dividend income will remain as follows:

•  The dividend ordinary rate – 8.75%
• The dividend upper rate – 33.75%
• The dividend additional rate – 39.35%.

• Self-employed people with profits above £12,570 will no longer be required to pay Class 2 NICs but will continue to receive access to contributory benefits, including the State Pension.
• Those with profits between £6,725 and £12,570 will continue to get access to contributory benefits, including the State Pension, through a National Insurance credit without paying NICs.
• Those with profits under £6,725 and others who pay Class 2 NICs voluntarily to get access to contributory benefits including the State Pension, will continue to be able to do so.

• The Annual Allowance (AA) is £60,000.
• Individuals who have ‘threshold income’ for a tax year of greater than £200,000 have their AA for that tax year restricted. It is reduced by £1 for every £2 of ‘adjusted income’ over £260,000, to a minimum AA of £10,000.
• No Lifetime Allowance (LA) charge. In addition, as previously announced the LA of £1,073,100 will be abolished from 2024/25. Changes will be made to clarify the taxation of lump sums and lump sum death benefits, and the application of protections, as well as the tax treatment for overseas pensions, transitional arrangements, and reporting requirements. Backing British business To increase business investment, the government has announced a number of measures which could raise around £20 billion per year from businesses in a decade’s time. The changes include:
•  Full Expensing will be made permanent.
• The removal of barriers to critical infrastructure by reforming the UK’s inefficient planning system and speeding up electricity grid connection times.
•  A package of pension reform and driving private investment from insurers into infrastructure by legislating for key reforms to Solvency II.
• Making £4.5 billion available in strategic manufacturing sectors such as auto, aerospace, life sciences and clean energy from 2025 for five years.
• New Investment Zones.
• 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.
• Changes to Research and Development.

• Making the cash basis of accounting the default position for the self-employed from 2024/25, with an alternative to opt for the accruals basis, together with technical changes to the regime.
• A number of changes to strengthen the Construction Industry Scheme from April 2024.

• To support those who are long-term unemployed to find work.
• To ensure that those with long-term sickness and/or disabilities are better equipped to manage their conditions and participate in work, if they are able to do so.

As part of the Back to Work Plan, the government will invest over £1.3 billion over the next five years to help tackle long-term unemployment by establishing an end-to-end process that supports and incentivises unemployed Universal Credit claimants to find work. These policies, which include expanding Additional Jobcentre Support and strengthening Restart, build on previously announced changes.

The government will also strengthen the Universal Credit sanctions regime to enforce the government’s expectation that those who can work must engage with the support available or lose their benefits. As a result, no claimant should reach their claimant review point at 18 months of unemployment in receipt of their full benefits if they have not taken every reasonable step to comply with Jobcentre support.

State benefits 

From April 2024, the government is increasing working age benefits in line with inflation by 6.7%. The government is also maintaining the Triple Lock and the basic State Pension, new State Pension and the Pension Credit standard minimum guarantee will be uprated by 8.5%.

Making Tax Digital

 The government has announced the outcome of the review into the impact of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) on small businesses which includes maintaining the current MTD threshold at £30,000 and design changes to simplify and improve the system. These changes will take effect from April 2026. The government will also ensure taxpayers who join MTD from 6 April 2024 are subject to the government’s new penalty regime for the late filing of tax returns and late payment of tax.