Autumn Statement 2024 – key takeaways

The Chancellor’s Autumn Statement focused on 'investing for the future'. Key announcements included the extension of full expensing for businesses, further support for the creative industries, and a commitment to maintaining the triple lock on pensions.

For SMEs, the continued focus on R&D and investment incentives provides a stable backdrop for planning, though the freeze on many tax thresholds remains a challenge.

Business investment and full expensing

The headline announcement for the corporate sector was making 'full expensing' permanent. This allows companies to deduct the entire cost of qualifying IT equipment, plant, and machinery from their taxable profits in the year the expenditure is incurred. This provides a significant cash flow advantage and certainty for businesses planning long-term capital investments.

Support for the self-employed

Following earlier changes, the Chancellor confirmed further simplifications for sole traders, including the abolition of Class 2 National Insurance contributions and a reduction in the main rate of Class 4 NICs. These changes are designed to reduce the tax burden on entrepreneurs and simplify the Self Assessment process.

The impact of frozen thresholds

Despite the positive announcements, the decision to maintain the freeze on Income Tax and National Insurance thresholds until April 2028 continues to draw more individuals into higher tax brackets as wages rise with inflation. This 'fiscal drag' means that while headline tax rates may be falling, the overall tax burden on individuals remains historically high.