2023 UK Autumn Statement: What does it mean for your wealth?

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We highlight the key measures of the UK's Autumn Statement and outline their possible impact on your wealth arrangements.

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November 22, 2023

UK chancellor, Jeremy Hunt, delivered his Autumn Statement announcing 110 measures that aim to boost long-term UK economic growth and ease some of the tax burden for British businesses and households.

It was accompanied by the Office for Budget Responsibility’s (OBR) economic and fiscal outlook, which gave a mixed review of the UK economy. Inflation isn’t expected to return to the Bank of England’s two percent target until the second quarter of 2025, while government gross domestic product (GDP) is now forecast to expand by 0.6 percent this year, rather than contracting by 0.2 percent.1

Here, we dissect the key points relevant to your personal wealth.

Key highlights

National insurance (NI)

  • Class 1 NI for employees will be cut from 12 percent to 10 percent from January 6, 2024.
  • Class 2 NI (currently a flat £3.45 a week for the self employed with earnings over £12,570) will be abolished from April 2024, with access to state benefits maintained.
  • Class 4 NI for the self-employed will be cut from nine percent to eight percent from April 2024.

Impact: For employed and self-employed individuals with earnings of at least £50,270 per annum, this will represent a saving of £754 and £557, respectively.

ISA reforms

  • Currently an individual can only subscribe to one ISA of the same type (e.g. Stocks and Shares ISA) each tax year. From April 2024, multiple subscriptions to ISAs of the same type will be allowed. Partial transfers of ISA funds between providers will also be permitted starting April 2024.
  • A digitalisation of the ISA reporting system has been announced to provide tools to support investors.
  • The age at which an adult ISA can be opened is increasing from age 16 to 18 beginning April 2024.
  • The annual allowances for adult ISAs (£20,000), Junior ISAs (£9,000), Lifetime ISAs (£4,000 excluding the government bonus) and existing Child Trust Funds (£9,000) will be frozen at their current levels for the 2024/25 tax year.
  • The Innovative Finance ISA investment universe will be expanded to include long-term asset funds and open-ended property funds from April 2024.
  • Increased investment flexibility with the addition of fractional shares to the approved list of investments within an ISA.

Impact: There will now be a limited window to the end of the current tax year where those aged 16 and 17 can continue to open both a junior and adult ISA allowing for £29,000 in subscriptions. From April 6, 2024, children aged between 16 and 18 will no longer be able to open an adult ISA, reducing the amount parents can support ISA savings for children by up to £40,000. 

Administrative changes will allow investors greater flexibility and choice in selecting different ISA accounts and moving funds between them.

Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs)

  • A sunset clause on EIS and VCT investments currently in place limits the relief to share subscriptions made before April 6, 2025. This sunset clause has been extended to April 6, 2035.

Impact: The government is committing to ensuring early-stage, innovative British companies have access to the investment they need to grow and develop. This is good news for individuals looking to invest in privately-owned British businesses while benefiting from tax reliefs. Annual investment of up to £2m per tax year in EIS attracts income tax relief of 30 percent, capital gains tax free growth and an inheritance tax exemption. Annual investment of up to £200,000 per tax year in VCTs attracts income tax relief of 30 percent and provides tax free dividends and capital gains tax free growth.

Tax avoidance crackdown

  • The government are looking to introduce tougher consequences for promoters of tax avoidance schemes. This includes a new criminal offence for those who continue to promote avoidance schemes after receiving a notice to stop and disqualification of directors involved in promoting tax avoidance.

Impact: Tax avoidance schemes have long been a target of the exchequer and these additional measures look to stop aggressive tax avoidance schemes at the root.

Tax return completion

  • An individual’s whose only source of income is taxed through Pay As You Earn (PAYE) will no longer be required to complete a tax return from 2024/25 onwards.

Impact: This is a welcome change to simplify the affairs of those who earned over the threshold for tax return completion (£100k per annum) or had to pay the high-income child benefit charge (those earning over £50k per annum who received child benefit, or their spouse received child benefit).

ATED (Annual Tax on Enveloped Dwellings) charge increasing

  • The annual tax charge (currently between £4,400 and £287,500 depending on the value of the property) is increasing by 6.7 percent for the 2024/25 charging period.

Impact: ATED is an annual tax payable mainly by companies and trusts that own UK residential property valued at more than £500,000. The increasing charge may trigger a review of whether the existing structure remains suitable as the case for de-enveloping may become more compelling.

One pension “pot for life”

  • The government is launching a call for evidence on a lifetime provider model to simplify the pensions market and allow individuals to move towards having one pension pot for life.

Impact: With the average individual in the UK working for at least six companies across their lifetime, the issue of collecting multiple small pensions continues to increase. This can lead to confusion, detachment from pension savings, and a lack of a consolidated investment strategy. To tackle this, the government is launching a call for evidence on a lifetime provider model which would allow individuals to have contributions paid into their existing pension scheme when they change employer. This would provide greater clarity on retirement savings, encourage more active participation, and allow individuals to retain control over retirement provisions.

Abolishment of the lifetime allowance

  • As previously announced the government are looking to abolish the lifetime allowance and will look to legislate for this in the Autumn Finance Bill 2023. The change follows draft legislation issued in July 2023 which set out how the removal of the lifetime allowance will impact areas such as tax-free cash (or Pension Commencement Lump Sums as they are also known) and lump sum death benefits.

Impact: The measure will clarify the taxation of lump sums and lump sum death benefits, and the application of protections, as well as the tax treatment for overseas pensions, transitional arrangements, and reporting requirements. This will take effect from April 6, 2024.

Actions to consider

A reduction in National Insurance and a general shift in rhetoric for personal taxation may be welcomed by many, but despite a freeze in alcohol duty most individuals won’t be in the mood to celebrate too soon.

The UK tax burden remains at a record high, and the announcements sit amid a backdrop of the reduced allowances and frozen thresholds announced in 2022.

For private clients, last year’s measures continue to leave personally invested, non-property assets, increasingly exposed to capital gains taxes at up to 20 percent, with dividends at up to 39.35 percent, along with a higher proportion of earned income drifting into higher and additional-rate tax bands.

The Spring Budget early next year could be the Conservatives’ last fiscal event before an election and were there to be a change in government, the new ruling party would surely set about putting their own stamp on the country’s finances.

For individuals navigating the impact of these ever-changing rules on their financial plans, diversity in the structures in which they hold wealth is important. As we’ve seen with ISAs this year and pensions in 2022, changes in rules may favour one structure over another, so remaining diverse in your allocation allows for an adaptable plan. For those seeking to manage this impact, there remains a range of tools available; from ISAs and pensions to international bonds and family investment vehicles, as well as a number of venture capital initiatives that reduce tax liabilities such as Enterprise Investment Schemes and Venture Capital Trusts.


1 https://obr.uk/efo/economic-and-fiscal-outlook-november-2023/#chapter-1


Please note: The information provided should not be mistaken for formal planning advice; it is imperative that you seek relevant advice for your own personal circumstances. RBC do not provide tax or legal advice and we would recommend that you seek appropriate advice in these areas. Rates of tax will be based on individual circumstance and tax rules are subject to change.

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