The autumn finance bill has been published to cut taxes and support businesses

Following last week's Autumn Growth Statement, the Autumn Finance Bill 2023 was published today (Wednesday 29 November 2023) enshrining a range of landmark tax changes into law.

The measures in the bill support UK businesses by cutting and simplifying taxes to help them invest less, making full spending permanent – ​​an effective corporate tax cut worth £11 billion a year.

It also streamlines R&D and expands the Institutional Investment Program and Venture Capital Fund schemes for an additional ten years each through 2035, ensuring that newer companies can attract the funding they need today to become the startups of tomorrow.

The majority of the tax changes in the bill will take effect from April 2024.

Nigel Huddlestone, Finance Minister at the Treasury, said:

“This bill represents our next step in making the UK the best place in the world to do business – it's how we grow our economy and raise living standards for everyone.

“We have the lowest corporate tax rate in the G7, and the full spending effectively cuts it by £11 billion a year – the biggest UK business tax cut in modern British history to help businesses invest at lower costs.”

The permanent full expenditure effectively cuts taxes by £11 billion a year and ensures that the UK will continue to have the lowest corporate tax rate in the G7 and the most generous capital allowances in the OECD group of major advanced economies, including the US. United. The United States, Japan, South Korea and Germany. The Autumn Statement is expected to lead to an additional investment of £20 billion a year by the end of the decade.

Permanent full spending helps companies invest continuously at a lower cost by allowing them to deduct 100% of the cost of a wide range of plant and machinery—such as trucks, drills, and office chairs—from their pre-tax profits. For every pound a company invests in plant or machinery, taxes are reduced by up to 25 pence.

Since the introduction of the super rebate – which preceded the full spending introduced in 2021 – UK investment has grown fastest in the G7.

In addition to reforms to capital allowances, Chancellor Jeremy Hunt announced other measures also included in the Bill today to reduce and simplify taxes to boost investment and deliver economic growth. These include:

• Changes worth £280 million a year to simplify and improve R&D tax credits. The government will consolidate existing spending credit on R&D and SME schemes.
• Legislation to provide more generous support to loss-making R&D-intensive SMEs was also announced in the spring.
• Extend the sunset clause for the Enterprise Investment Program and Venture Capital Fund scheme until April 6, 2035. – For the creative sector, reform tax credits on film, television and video games to refundable spending credits.
• Expanded “Cash Basis” – a simplified way for over four million small and growing traders to use a simpler way to calculate their profits and pay their income tax.

The Bill received its first reading in Parliament on Monday 27 November 2023. It will now follow normal passage through Parliament.

More information

• Read the fall 2023 finance bill.
• The bill also makes provision for several tax changes that were previously announced and consulted on.
• In March 2021, the former Chancellor announced the superdeduction, the largest two-year business tax cut in modern British history, under which businesses saved up to 25p for every pound they invested. Then in the Spring 2023 Budget, the current Chancellor introduced the temporary full spending, three-year capital allowance policy which also provided up to 25p for every £1 invested.
• In order to provide certainty, when he announced the full expenditure, the Chancellor of the Exchequer was clear that his ambition was to make it permanent when financial circumstances permitted. In the autumn statement, the Chancellor emphasized this by confirming that he would bear all the expenses permanently. The largest business tax cut in modern British history over five years.
• The changes to National Insurance, which will come into force on 6 January 2024 for employees and 6 April for self-employed people, will be legislated through a separate bill to the Autumn Finance Bill 2023.