Autumn statement: tax cuts for self-employed and employed

No reprieve from inheritance tax 

By Edie Bourne

Doctors who are self-employed in their private practice have received a boost from the Chancellor in his Autumn Statement.

Jeremy Hunt said he was ‘delivering the biggest business tax cut to Britain, ever’ in his fiscal speech. 

He announced the abolition of Class 2 NICs for the self-employed, normally paid on profits above the current lower profits limit of £12,570. Their rate of Class 4 NICs will also reduce from 9% to 8% in April 2024.

Mr Hunt also revealed a tax cut for employed workers, with National Insurance down from 12% to 10% from January 2024.

However, those employing staff will see increased practice costs, with the national living wage jumping by 9.8% to £11.44 per hour. 

Patrick Convey, technical director at Cavendish Medical, explained: ‘As usual, some of the big predictions of what might be in the Chancellor’s speech did not come true. 

‘Many were hoping for inheritance tax reform, but there was no mention of the anticipated decrease – although this may have been held back as a useful pre-election announcement. 

‘Setting January as the date for some of the fiscal changes announced is also highly unusual and will lead to further speculation of a May election.’

The Government also confirmed that the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) are to be extended to 2035. Both schemes support investment in UK start-ups. 

From April 2024, ISA investors can choose to contribute to more than one cash or stocks and shares investment wrapper. 

The contribution limit will remain at £20,000 per year but can now include ‘illiquid assets’ such as property and private equity.  

Mr Convey added: ‘As we are all unable to predict what might happen next year, particularly in terms of governments and policies, we would advise that you ensure your financial affairs are organised to the best of your ability and can withstand the merry-go-round of changes likely to be incurred. Please do seek expert help to do this.’