The Chancellor's Autumn 2023 Statement – Seven Business Takeaways

A mixed bag for business. But Is it enough to ‘supercharge’ the growth of the UK’s SMEs? 

Seven of the key takeaways for business are listed below

1. Full Expensing

Quoted by the chancellor as being “the largest business tax cut in modern British history,” was the decision to make the full expensing payment scheme permanent. This allows 100% first-year relief to companies on qualifying main rate plant and machinery investments.

2. R&D Tax Credit Merge

In April 2024, the current R&D expenditure credit (RDEC) for larger businesses and the SME R&D scheme for smaller enterprises will merge to become a single scheme. Learn more about R&D tax relief for small business.

The result will be a reduction in the tax rate for loss-making companies. From 25% to 19% as well as a lowering of the threshold for additional support from 40% to 30%. This expansion will increase eligibility for an additional 5,000 SMEs to join. 

Businesses below the 30% threshold will also receive a one-year 'grace period', allowing more to be classified as ‘R&D-intensive’.

3. Investment Zones

“Mini-Canary Wharfs” as the chancellor calls them will be developed in the  East Midlands, West Midlands, Greater Manchester and Wales and focus on attracting advanced manufacturing. They are projected to attract approximately £3 billion in private investment along with the creation of 65,000 new jobs.

4. Manufacturing

£4.5bn of additional support is set to be made available between 2025 and 2030 for “Strategic manufacturing”. This includes £975m for aerospace firms, £960m for new green industry firms and £520m for life sciences, such as medical research companies.

5. AI

Following the successful establishment of supercomputing centres in Edinburgh and Bristol an investment of £500m is to be made in "innovation centres". The aim is to strengthen the UK's positions as a leading global AI hub.

6. Planning applications

Reforms are to be made to the planning system allowing local authorities to charge the full cost of major business planning applications in exchange for meeting faster processing timelines. Failure on the authority's part will lead to an automatic refund and subsequent free processing.

7.EIS and VAT

Sunset clauses on EIS and Venture Capital Trust (VCT) schemes are both set to be extended to 2035. The EIS (enterprise initiative scheme) has raised a total of £18.2 billion over the past decade.

Full details on the policy paper can be found at - Autumn Statement 2023

Profit First Accounting can help you to maximise profits within your business. NAS is a certified Profit First Professional