The Autumn Statement. What Does It Mean for Businesses and Individuals?

On Thursday, 17th November 2022, Chancellor of the Exchequer Jeremy Hunt delivered the much-anticipated Autumn Statement.

The cost-of-living crisis dominates the headlines, and the October mini-budget delivered by former Chancellor Kwasi Kwarteng garnered an overwhelmingly negative reaction. As such, all eyes were on this Autumn Statement for an idea of how it would differ from the mini-budget and how it might impact the rest of the country, business owners, those on lower incomes and others struggling with rising inflation and skyrocketing energy bills.

Simply put, the Autumn Statement couldn’t be more different than the mini-budget, but what does it mean for the businesses and individuals awaiting it with bated breath?

What the Autumn Statement means for businesses

While it’s hoped some of the measures brought in will help businesses weather the storm, it’s feared that some of the measures may exacerbate issues businesses are already facing.

Here are some of those measures:

• Business rates are frozen for another year to protect against rising inflation, although the business rates revaluation will still go ahead in April 2023.
• Dividend and capital gains tax allowances are being slashed. Dividends from £2,000 to £1,000 from 2023-2024, then to £500 from 2024-2025. Capital gains tax allowance from £12,300 to £6,000 from 2023-24, then £3,000 from 2024-2025.
• The national living wage is to increase to £10.42 per hour from April 2023.
• Employers’ National Insurance Contributions are frozen.
• The VAT threshold will remain frozen at £85,000 until March 2026.
• The Energy Bill Relief Scheme will remain until 31st March 2023, when the government will review it.

What the Autumn Statement means for individuals

Much of the cost-of-living crisis’s media coverage has focused on how it will affect individuals, especially those on low incomes or benefits.

Some of the measures that will impact individuals include:

• The National living wage increase, while an extra cost to businesses, could be a vital support to those on lower incomes.
• Benefits and pensions will increase in line with inflation (an increase of 10.1%).
• Electric vehicles are no longer exempt from road tax.
• English councils can now raise council tax up to 5%. Previously, the cap was 3%.
• The £400 discount for household energy bills will end in April, with support limited to £900 for 8 million low-income households, £300 for 8 million pensioner households, and £150 for 6 million on disability benefits.
• The basic tax rate and personal allowance have been frozen until 2028.
• The higher tax rate threshold has been lowered from £150,000 to £125,140.

Is there help for people struggling with the cost-of-living crisis?

While the government has pledged a support package worth £13.6 billion, there were no specific support schemes comparable to those offered during the coronavirus pandemic, like the Coronavirus Business Interruption Loan Scheme (CBILS) or Bounce Back Loans (BBLs).

That said, if you or your company encounters unpayable debts as a result of the cost-of-living crisis, help is still available. Speak to us for free, impartial, non-obligatory advice, and we can help guide you towards the solution best suited to your circumstances.

Help for companies

Times are hard for everyone, so people are cutting back on expenses, and such a drop in takings coupled with the increase in the minimum wage could push some companies into insolvency.

If you’re a company director in such a situation, there are ways to tackle your company’s debt, whether that involves returning it to a profitable state or closing it in an orderly manner to draw a line under the debts.

The options for directors of insolvent companies include the following:

• Repaying the debt in affordable instalments
  A popular way to relieve company debt is by applying for a Company Voluntary Arrangement (CVA). These allow insolvent companies to repay their unsecured debts in monthly instalments at a rate tailored to what the company can afford. They enable the company to continue trading while repaying and pause creditor pressure for the arrangement’s duration.
  More on Company Voluntary Arrangements (CVAs)
• Restructuring the company back to a profitable state
  If the insolvent company requires more substantial restructuring to return it to profitability, then an insolvency practitioner can act as administrator. Here, the IP will assess the business and decide which parts of the company can be restructured to a profitable state and what parts or assets would be better off sold.
  More on company administration
• Closing the company in an orderly manner
  Occasionally, the company’s debts may be of such a level that closing the company in an orderly manner would be the better option for all parties. In this case, an insolvency practitioner can act as liquidator while the company undergoes a Creditors Voluntary Liquidation (CVL). A CVL draws a line under the debt and closes the company, often offering creditors a better return than if they were to force the company into compulsory liquidation.
  More on Creditors Voluntary Liquidations (CVL)

Help for individuals

There is also help for individuals, whether you’re a sole trader struggling to repay business-related liabilities or just struggling to repay your personal debts.

• Repaying the debt in affordable instalments
  An Individual Voluntary Arrangement (IVA) is a formal repayment arrangement that allows insolvent individuals and sole traders to repay their debts in monthly instalments tailored to what’s affordable. Creditor pressure is paused for the arrangement’s duration, usually five years.
  More on Individual Voluntary Arrangements (IVAs)

In summary

After October’s controversial mini-budget, the Autumn Statement signalled a dramatic change of direction for the government. While there isn’t as much support available as during the coronavirus pandemic, some of the measures announced are designed to ease the strain on individuals and businesses. These measures have included freezes to rates, thresholds, and an increase in the minimum wage. On the flip side, the raised possibility of council tax rises and a change in how energy relief is dished out could mean further hardships for people.

Fortunately, there are options to help alleviate your business or personal debts, with several insolvency relief options available depending on your circumstances. Speak to our initial advice team for detailed advice as to which solution would be best suited to your circumstances.