The Autumn Statement
19th September 2023What is the Autumn Statement?
The Autumn Statement provides an update on the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility (OBR).
The forecasts, called the Economic and fiscal outlook (EFO) are published twice yearly, at Budget and at Autumn Statement. They look at the future performance of the UK economy, in this case for the period to 2018-19.
The OBR provides an updated statement on the current state of the public finances. The update also outlines whether the government is going to meet its own fiscal objectives. The main objective, set by government, requires it to balance its budget at the end of a rolling five-year period. A balanced budget means the amount spent by the government per year, on things such as the NHS and welfare is equal to the amount brought in by things like taxes.
During his Autumn Statement the Chancellor updates MPs on the government’s taxation and spending plans. They are based on the latest forecasts for the UK economy, from the OBR.
The Office for Budget Responsibility (OBR) was established in 2010 to provide independent and authoritative analysis of the UK’s public finances.
When is the Autumn Statement?
The Chancellor of the Exchequer, Jeremy Hunt, has confirmed that the Autumn Statement will be on 22 November 2023. The Autumn Statement can affect tax policy, benefits, and much more. The Chancellor will make his announcement to Parliament, setting out the Government’s plans on all matters fiscal and economic. Interestingly, this could be the Chancellor’s last statement before the next General Election. This would depend on the time frame that the government chooses.
Included in the announcement was the news that the OBR have been commissioned to prepare an economic and fiscal forecast. This will be presented to Parliament alongside his Autumn Statement.
Rumours have already started about what the Chancellor will – and won’t – announce, so what are some of the likely changes?
Mr Hunt is already playing down the prospect of income tax cuts and he insists inflation needs to come down further from its rate of 6.4%. He has recently stated that to put money into people’s pockets quickly, the fastest thing would be to deliver on the pledge to halve inflation. Indeed, some news outlets are predicting a tax rise in a number of other areas.
Does He Have a Plan For Growth?
He has lately talked of a four-point growth plan focusing on enterprise, education, employment, and investment opportunities.
We could see some promises around the cost of living, with energy bills still relatively high and winter approaching.
Pensions and benefits are always a big focus of any financial statement. However, there are not many rumours about potential changes. We predict the ‘triple lock’ on pensions will stay in place for now. In addition, pensioners can expect around an 8% increase to their state pension. Rumours flourish that this may change after the next general election. There may be other changes to pensions reliefs and benefits. We will keep you up to date as and when we hear any news.
The government is currently analysing responses to several tax consultations that closed in the summer. These include reform of the Construction Industry Scheme (CIS), expanding the cash basis for unincorporated businesses, and merging the two Research &Development (R&D) schemes for limited companies into one. It’s reasonable to expect the Chancellor to make announcements in these areas.
Alongside any announcements to tax policy, the Chancellor will be looking at budgets for schools, the police, hospitals, and the military. Expect to see some changes to these.
What next?
Whatever happens on the 22 November, we can be sure tax rules and business regulations are progressively becoming more complicated. Getting expert help is essential. Please contact us about planning for change. We can provide a full tax review. This will help identify the potential marginal tax traps and help you to avoid them.
