Chancellor Jeremy Hunt has announced a series of measures to help boost the UK economy as part of his Autumn Budget including slashing National Insurance by 2% and freezing business rates for retail and hospitality.
As part of the new measures, Hunt revealed that National Insurance will be cut from 12% to 10% from 6 January. This means that someone earning an average of £35,000 per year will save up to £450.
Hunt said: “If we want people to get up early in the morning, if we want people to work nights, if we want an economy where people go the extra mile and work hard, then we need to recognise that their hard work benefits all of us.”
Hunt also announced that the National Living Wage will be raised to £11.44 per hour and will apply to 21 and 22-year-olds for the first time.
In a welcome move for the retail and hospitality industries, the chancellor confirmed that the government will freeze the small business multiplier for a further year and the 75% discount on business rates up to £110,000 discount for retail, hospitality and leisure businesses will also be extended for another year.
Hunt said these measures will save the average independent shop over £20,000 and the average independent pub over £12,800 next year.
However, the chancellor maintained that these sectors “cannot rely on temporary support forever”.
He also confirmed that full expensing, which sees a company acquiring machinery or plant, able to take the cost out of their pre-tax profits – saving them having to pay tax on the equipment, would be made permanent having previously been introduced for three years in the spring.
The chancellor said the OBR believes this will increase annual investment by roughly £3bn a year – and a total of £14bn over the forecast period.
He also confirmed that alcohol duty has been frozen until 1 August 2024 at least, keeping the price of a pint “cheaper than the shops”.
Furthermore, the chancellor stated that he would deliver £110m to deliver nutrient mitigation schemes and £32m to “bust the planning backlog” alongside £450m for local authority planning to deliver “2,400 new homes”.
For the self-employed, class 2 National Insurance will be abolished altogether saving the average self employed person £192 per year.
Class 4 National Insurance will also be cut by 1 percentage point to 8% per year and will save the average self-employed person £382 from April.
Hunt said the measures outlined in his Autumn statement will “attract £20bn more business investment a year in the next decade”.
It comes as he revealed the UK economy is set to grow by 0.6% this year and is expected to increase by 0.7% in 2024.