Let us take the stress out of Self Assessment
Get your tax return sorted by experts for only £200 £100+VAT!
Take the stress out of Sole Trader Accounting, for just 1%+VAT of your money earned. No monthly subscriptions! With CrunchONE
Get 25% Off Crunch Pro and Premium for the first 3 months!

What the Autumn Budget 2023 Means For UK Small Businesses

image of Union Jack purse
Picture of crunch software on mobile

Professional Bio Templates & Examples

Create a compelling professional narrative for a proper, attention-grabbing introduction.
Website bios
Speaker intros
Professional Profile

In his budget announcement earlier today at 12.30pm on 22nd November 2023, Jeremy Hunt, Chancellor-of-the Exchequer outlined his plans to boost the British economy with a range of changes to the existing public spending budget.

Although prior to the address these were widely expected to be relatively minor adaptations, the new budget contained a couple of surprising and significant policy shifts.

Notably, a Class 4 national insurance (NI) reduction for the self-employed from 9% to 8%, abolition of the Class 2 NI, and making 'full-expensing’ permanent - ''the biggest business tax cut in modern history''. More severe measures to coax people on benefits back into work were also announced.

The first two of these, clearly being made due to the government feeling emboldened by their success in delivering on their promise to halve inflation, which has reduced from 11.1% to 4.6%. And is on target to hit 2% by 2025.

Which the Chancellor cited as an impressive achievement of the conservative government, as well as success in reducing debt and lowering borrowing.

He also claimed that the UK economy has grown faster than many leading world economies since the 2010 recession, with 0.7% economic growth forecast for next year.

He stated that the core aims of the new budget are to ‘’reduce debt, cut taxes and reward work’’, and that the government was ’’making decisions for the long-term’’.

The other main changes and decisions in the Autumn budget include:

  • National Living Wage increase - to £11.44 per hour, an increase of 9.8%
  • NI reduction - cut 12% rate by 2 percentage points from Jan 6 2024 to 10%, meaning £450 year per extra for an average salary of £35,000
  • State Pension increase - by 8.5%, from April 2024, equivalent £221.20 per week
  • Increase in UC - by 6.7% from April, or £470 per year for 5.5 million people
  • Increase in housing allowance - to benefit 18 million households
  • No increase in alcohol duty - on beer, cider wine spirits
  • A Pledge to keep growth in public spending lower than growth in economy
  • Tougher measures to bring long-term benefit claimants back to work by mandatory work-placements and threat of benefit closure

No doubt this budget will be met with mixed sentiment from the tax-paying UK public and businesses. 

The Shadow Chancellor, Rachel Reid, immediately dismissed the budget as inadequate, saying  that ‘’nothing announced today will remotely compensate’’ for thirteen years of economic damage. 

How will these changes affect UK small and medium sized businesses?

Whatever your view of the Autumn budget is, as a small business owner it’s important to understand what implications positive or negative it could have for your business. Let’s assess them now:

  • Business investment

Jeremey Hunt said that the budget would ‘’back business with 110 growth measures’’ with £20 billion of investment. This will include funding for key growth sectors like AI, film, automotive, aerospace, life-sciences, green energy. 

To make access to green energy more affordable/accessible, ease the financial burden of development and open up investment opportunities. These plans will tie into the overarching schemes  of ‘Levelling Up’ and Net Zero.

  • Business tax

Capital Allowance - Full expensing made permanent, meaning the cost of machinery for businesses will remain tax free.

Small business rates relief - a freeze small business multiplier and an extension of the 75% discount (for retail, hospitality and leisure)on business rates for one year. Said to save independent shops over £20,000 next year.

Self-employed taxes reform - class 2 NI paid by self employed with profits over £12,570 will be abolished, saving them £192 per year. Class 4 NI will be cut from 9% to 8%, resulting in a £350 per year saving for 2 million self-employed people.

Freeze on alcohol duty - duty on beer, cider wine spirits will remain as is. Which is good news for hospitality businesses.

R&D tax - The government will introduce a new simplified Research and Development tax relief, combining the existing R&D expenditure credit (RDEC) and the Small or Medium sized enterprise (SME) schemes.

Also, there will be a reduction in the rate loss-making companies are taxed in the new merged scheme, falling from 25% to 19%.

The threshold for additional R&D support for intensive loss-making SMEs (originally announced in the Spring) will be lowered to 30%.

  • Legislation

Late payments procurement acts - companies who want to have government contract must show that they pay their bills within 55 days, with a future target of reducing this to 30 days

Reform to planning applications - Local councils will be empowered to recoup the entire expenses associated with significant commercial planning applications, provided they adhere to newly established, expedited processing deadlines. 

Should these authorities not meet these timelines, the fees will be automatically reimbursed, and the application will be processed at no cost.

Pension reforms: Workers will now have the legal right to demand that their employer pays their pension into an existing pension pot. Meaning that the employer can no longer choose a scheme to pay into.

Takeaway for SMEs

The Autumn Budget 2023 introduces several impactful changes and initiatives aimed at bolstering the UK economy. Reflecting the government's confidence following their success in halving inflation. 

Overall, while the budget might receive mixed reactions, it's crucial for small business owners to understand its implications for their operations and financial planning. It could significantly impact SMEs in the UK by:

1. Reducing financial burdens through lower National Insurance contributions for the self-employed and a freeze on small business rates.

2. Enhancing investment opportunities with a £20 billion injection into key growth sectors, making green energy more accessible and affordable.

3. Providing tax relief with the permanence of full expensing for business investments and a continuation of the alcohol duty freeze, benefiting particularly those in the hospitality sector.

4. Streamlining operations with reforms in planning application processes and late payment regulations, potentially improving cash flow and project execution for small businesses.

If you’re interested in learning more about how to boost your business finances then you’ll love our Crunch’s Knowledge base where we have free expert information on all things SME related.

guide cover for "8 great ways accountancy can help your ecommerce business"

Unlock your free ecommerce business guide!

Expert Insights
Actionable Tips
Strategic Advice

To receive our guide on valuable insights into the world of expenses for limited companies please submit your details below.

Please enjoy our guide on 8 Ways Great Accountancy Helps ecommerce Businesses Succeed. Click below to download our PDF guide.
Oops! Something went wrong while submitting the form.

By submitting you are agreeing to be contacted by Crunch.

Speak to an accounting expert

If you're unsure what level of support you need, our friendly team are on hand to help you pick the right package for you.
Self Assessment tax returns done for you, from just £200 £100+VAT
Take the stress out of Sole Trader Accounting, for just 1%+VAT of your money earned. No monthly subscriptions! With CrunchONE
Get 25% Off Crunch Pro and Premium for the first 3 months!
Share this post
James Waller
Content Specialist
Updated on
November 22, 2023

Knowledge Hubs

Take control of your accounts, today

Crunch’s effective software package includes being able to talk to an expert client manager and a Chartered Certified Accountant. You can count on Crunch to make you productive and profitable.
Picture of crunch software on mobile

Professional Bio Templates & Examples

Create a compelling professional narrative for a proper, attention-grabbing introduction.
Website bios
Speaker intros
Professional Profile

Unlock Your Free Limited Company Expense Guide!

Expert Insights
Actionable Tips
Strategic Advice

Save your seat! Live e-commerce webinar

Register and soak in the wisdom from top industry leader! June 27, 2024 1:30 PM
Dive into e-commerce basics
Expert industry insights
Practical tips and savvy tricks
Pro Tip
Looking for a dedicated accountant?

Our Enterprise packages offer tailored support for you and your business. You can focus on your business, we'll crunch the numbers.

Pro Tip
Boost your business finances with our Ltd Company packages!

Award-winning software with support from expert accountants

Pro Tip
Take the stress out of Sole Trader Accounting

Just 1%+VAT of your money earned. No monthly subscriptions! With CrunchONE

Pro Tip
Get 50% off your Self Assessment

Get your tax return sorted by experts for only £100+VAT!

Pro Tip
Using cloud-based accountancy software to manage your finances gives any small business a big advantage!

At Crunch we provide affordable cutting-edge, easy-to-use software with real human support from expert chartered accountants. That’s probably why 81% of our clients would recommend Crunch.

Pro Tip
Did you know - you have access to a Chartered Certified accountant for free on our paid subscriptions?

Book a call with our one accountants and get your questions answered. Just £25.50 +VAT for Crunch Free users.

Pro Tip
Get 50% off your Tax Return!

Crunch’s Self Assessment service provides an expert accountant to complete, check, and file your Self Assessment for you for just £100 +VAT.

Pro Tip
Did you know - We have a free plan that is great for sole traders and limited companies?

Why not see for yourself? It’s simple and easy to use and 100% free.