Autumn Statement 2023
Chancellor Jeremy Hunt has presented the details of his Autumn Statement during a session in the House of Commons yesterday. This statement outlines the tax and spending strategies that the government intends to implement in the upcoming year, which will have an impact on the income and financial plans of numerous individuals. Additionally, it also determines the allocation of funds for essential public services.
Below is a brief overview of the key measures outlined in this statement that affect our industry.
The journey to electrification
In the Autumn Statement, the government has allocated £2bn in grants and loans to support the automotive industry in its journey to electrification.
It was also declared that there would be a revision in the grid connection process with the aim of reducing waiting times. As part of this reform, measures will be taken to release more than 100GW of capacity, allowing projects to connect to the grid at an earlier stage.
Full expensing policy
The government announced that full expensing would be made permanent to provide maximum certainty to businesses and encourage sustained business investment. However, cars are excluded from this scheme, along with vehicles purchased for the purpose of leasing. Consequently, leasing companies are unable to benefit from reduced tax liabilities and subsequently pass on these savings to their customers.
Living wage and national insurance
The Chancellor also announced changes to national insurance and the living wages. For employees, the rate of national insurance paid on earnings of between £12,570 and £50,270 a year will be cut from 12% to 10% in January 2024.
From 1 April 2024, the National Living Wage (NLW) will increase by 9.8% to £11.44 with the age threshold lowered from 23 to 21 years old.
These changes can also affect the salary sacrifice schemes, which aim to make electric vehicles more accessible to drivers. The alterations to the living wage and national insurance could impact some employees’ eligibility for salary sacrifice schemes.
With this in mind, it is important that fleet managers review their salary sacrifice schemes and seek tax advice, where needed.
For further details, please see below