Jeremy Hunt unveiled his much-anticipated Autumn Statement – not many rabbits in hats this time around since almost all the announcements had already been briefed to the media. As expected, it was a budget of tax rises and spending cuts, but there was also a much-needed focus on growth, particularly in light of the current economic position.

As ever, the devil will be in the detail, but Accountant Services have compiled a list of the key things you should know about and how they might affect you.

Appointment of Advisor on Skills Reform

Recognising that we can’t achieve growth without people – and their skills – Hunt announced the appointment of Sir Michael Barber, Tony Blair’s former advisor on Schools Standards to lead a review into the implementation of current skills reforms.

Although the Apprenticeship Levy was not mentioned today, Accountant Services will continue to ensure our clients views on the failing policy are heard loud and clear. For too long, our clients have paid into a pot which they can’t access resulting in a huge amount of unspent levy funding being returned to Treasury and disappearing into a black hole. Our skills offerings need to incentivise both employer and employee, genuinely meeting the needs of those in the labour market.

Boosting Labour Market Participation

Last summer, we saw rising rates of economic inactivity amongst working age people. Now, with 630,000 more people not working and not seeking work than before the pandemic, government has recognised the need for intervention.

Hunt announced the Department for Work and Pensions would “thoroughly review workforce participation”, concluding that work in early 2023.

Tax changes

In a stark contrast to his predecessor, Hunt started his statement by saying that those with more should pay more. That’s why the income tax additional rate threshold (ART) is being lowered from £150,000 to £125,140 from 6 April 2023. Income tax thresholds along with National Insurance contributions were already frozen at their current rate until 2026 – both have been extended for a further two years, until April 2028. We already know that National Insurance impacts labour-intensive industries – those hit hardest by the pandemic – the most, so government will have to monitor this closely.

In addition, Hunt announced the reduction of the Dividend Allowance from £2,000 to £1,000 from April 2023, and to £500 from April 2024. Similarly, the Capital Gains Tax Annual Exemption amount will also be reduced from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024.

Business rates support

Given the financial pressures businesses are already under, and the additional pressure on them to help boost economic growth, we’re pleased that Hunt’s statement provided some much-needed support on business rates.

The business rates multipliers will be frozen in 2023-24, and upward transitional relief caps will provide support to ratepayers facing large bill increases following the revaluation. Additionally, relief for the retail, hospitality and leisure sectors will be extended and increased, and there will be also be extra support for small businesses. We’ll share more details of exactly what that support looks like when we get it.

National Living Wage increased

From 1 April 2023, the national living wage for people aged 23 and over will increase from £9.50 to £10.42 an hour. This increase will provide some support for workers struggling with cost-of-living pressures but giving people the support they need requires a wholesale approach.

As well as paying workers a fair wage, we need to see proper skills reform, accessible pathways to train, reskill and upskill, and labour market activation schemes, like Restart, included too. That’s why the focus on addressing rising economic inactivity is so welcome, and something Accountant Services called for as part of our Overcoming Shortages work.

NHS Workforce planning

The government asked the former Health Secretary Patricia Hewitt to lead an independent review into oversight of Integrated Care Boards in England. In addition, the government will publish a long-term NHS workforce plan next year. This will set out how many doctors, nurses and allied health professionals we need in the NHS, how to boost workforce productivity and address retention.