The UK Finance Minister, called the Chancellor, held the Autumn Statement on Wednesday, and announced further financial backing to UK businesses, which will improve regulation, and stimulate investment and growth across the country.
In the UK, inflation has fallen to below 5% (from over 10% earlier this year) and is forecast to be below 3% by the end of 2023. This has the effect of reducing the cost of UK government borrowing, and therefore the cost of running the country.
Key points at the glace:
- Social costs
The most significant announcement is the reduction to Social Taxes, called National Insurance Contributions (NIC). The main rate applicable to employees will be reduced from 12% to 10% from January 2024 so that people will see the benefit of this in their bank accounts quite soon. The reduction will apply to annual salary between GBP 12,570 and GBP 50,270, so those with earnings over GBP 50,270 will still pay 2% on the excess.
- Company taxes
The main change here is to extend the annual full write off against Company taxes for capital expenditure up to GBP 1 million each year, which was to end in 2026 to make it permanent. There is also a provision to increase the tax deduction for annual capital expenditure over GBP 1 million.
- Infrastructure and levelling up
Three advanced manufacturing Investment Zones will be established in Greater Manchester, East Midlands and West Midlands – together generating GBP 3.4 billion of private investment and creating 65,000 high-quality jobs within the next decade.
Funding of GBP 4.5 billion to attract investment to high-growth industries of the future, including green energy, aerospace, life sciences and zero-emission vehicles.
Some GBP 500 million over the next two years to fund artificial intelligence innovation centres.
Financial incentives for investment zones and tax reliefs for freeports extended from five to ten years.
In further news, demonstrating confidence in the UK economy, Nissan is to commit to making future electric versions of its two best selling cars, Qashqai and Juke models at its UK factory. The investment is thought to be in the region of GBP 1 billion and will be supported by a government contribution from the Automotive Transformation Fund (ATF), which received an additional GBP 2 billion from the UK government on Wednesday.