Accountants react to the ‘Autumn Statement for growth’by
Another year brings another Autumn Statement, prompting new reactions from the AccountingWEB community.
Jeremy Hunt’s “Autumn Statement for growth” saw an announcement of 110 measures for the AccountingWEB community to delve into and dissect. The Chancellor was heavy on tax-cutting measures and argued, “We cut taxes to help bigger businesses invest, we cut taxes to help smaller businesses grow. We cut taxes for the self-employed and keep our country running.”
However, these tax cuts seemed to have been met with uncertainty, as accountants looked at how Hunt’s announcements will impact them, their clients and the economy.
As the Autumn Statement approached, members of the Any Answers community shared their scepticism and distrust over what would be revealed.
Many felt that it would be an opportunity for Hunt to set up bear traps for the next government, making the policies futile. Ireallyshouldknowthisbut commented, “Let the other lot have a go rather than announcing a load of bear traps to trip up Labour politically so they have to undo it all. Utter waste of everyone’s time and productivity.”
Others agreed and this was summarised by i’msorryihaven’tgotaclue who wrote: “I predict a pocketful of promises, all post-dated, as a poison chalice for Sir Keir in 2024.”
The doubts and distrust continued after the Autumn Statement, and on an Any Answers post that encouraged post-match discussions, the community was quick to voice their opinions.
AccountingWEB commenter Mr_awol said, “Amazing how the magic money tree bears fruit when you are facing an election you are currently tipped to lose.”
This was further reiterated in the comments of the AccountingWEB article that broke the news of the Autumn Statement. PChapman wrote, “All carefully calculated to not give much away but seem like they’re helping out... almost as if there’s an election round the corner.”
The community shared a suspicion over the timing and intentions behind the Chancellor’s policies, taking the Autumn Statement with a pinch of salt.
Despite this, it did not stop them from dissecting and criticising the policies that had been announced.
AccountingWEB posted a poll that asked what tax measure would have the most impact on clients. Out of abolishing class 2 and cutting class 4 national insurance contributions (NIC), the 2% cut on the main rate of national insurance, the increase in the national living wage and the extension of full expensing, the majority (43%) felt that the increase in the national living wage was going to be the most impactful.
Leaving small businesses out to dry
The 9.8% increase in the national living wage to £11.44 an hour was thought to have a large effect on businesses and add financial strain to those already struggling.
“With national minimum wage increases, that will cost employers even more. The small business owners are struggling as it is, surely this will result in more of them going to the wall or having to reduce the number of employees,” wrote AccountingWEB reader Msas.
Additionally, the absence of any mention of employers’ NIC, despite the changes to employees’ NIC coupled with the rise in the national living wage, presents a bleak scenario for struggling small businesses who were waiting on the Autumn Statement for a glimmer of hope.
Another member commented, “Quite clear to me that Rishi and now Jeremy, both view small business as nothing other than a group of people out to abuse the system and who should pay employee rates of tax and NI. Every single policy they’ve come out with since Covid seems targeted to do nothing but make things harder for this size of business.”
The buzz around national insurance
Despite the results of the poll, national insurance was the most common tax measure talked about by the AccountingWEB community.
The 2% cut on the main rate of national insurance, the abolishment of class 2 NIC and the reduction of class 4 NIC left many accountants questioning what this meant for themselves and others.
WinterDragon said, “While many of our clients may be celebrating the cut to NI, if all our small limited companies switch to self-employed then our fees will drop quite a bit.”
Another member, Charlied, was concerned about the impact this would have on the healthcare industry. They said, “Given that in April 2022 increased NI by 1.25% for money for social care and an overstretched NHS, how does Mr Hunt now continue to maintain the increased funding to social care and the NHS?”
A few were also frustrated with the continuous mid-year alterations with accountantccole commenting: “I wish they’d stop changing NI mid year.” This was agreed by Mr_awol who replied: “I could practically hear my payroll department thumping the desks at that point.”
The uncertainty continues
On the other hand, it was the noticeable absence of certain policies that frustrated others. Hunt didn’t touch upon either inheritance tax or stamp duty land tax (SDLT) in his statement.
AWEB reader Norstar revealed his annoyance over SDLT being ignored. “Stagnant house market – SDLT break for downsizing needed and not provided,” they commented.
As a result, some of the community are now anticipating what Hunt might have in store for the Spring Budget. “As always the devil is in the detail and there will no doubt be Easter bunnies jumping all over the spring Budget as we gear up for an election,” PChapman wrote.
Visit our dedicated Autumn Statement 2023 hub here to find all related articles from our experts.