Key Amendments Announced in the Autumn Statement 2023

In this article, we pull out the key amends announced in the Autumn Statement that you’ll need to be aware of in terms of your CII exams. This article is particularly relevant to R01, R03, AF1, R02, AF4, CF6 and R07.

This article is relevant to examinable tax year 2023/24 and is correct as at 5 December 2023.

There were few surprises in Jeremy Hunt’s second Autumn Budget, with the NI cuts being the exception to the rule.

Rather than focus on the politics, we pull out the key amends that you’ll need to be aware of in terms of your CII exams.

Dividend allowance

The dividend allowance halves to £500 from 6 April 2024.

National Insurance – Class 1

From 6 January 2024, the Class 1 main rate falls from 12% to 10%.

For company directors, or when working out NICs on an annual basis, the blended rate of 11.5% should be used for the 2023/24 tax year.

National Insurance – Class 4

From 6 April 2024, the Class 4 main rate falls from 9% to 8%.

National Insurance – Class 2

From 6 April 2024, the self-employed with profits above £12,570 will no longer be required to pay Class 2 NICs. They will continue to receive access to contributory benefits, including the State Pension.

Those with profits between £6,725 and £12,570 will continue to get access to contributory benefits through a National Insurance credit, without paying NICs.

Those with profits under £6,725 who pay Class 2 NICs voluntarily to get access to contributory benefits, will continue to be able to do so. The weekly rate is frozen at £3.45.

Capital Gains Tax – reduction to annual exempt amount

From 6 April 2024, the CGT annual exempt amount for individuals and legal personal representatives (LPRs) will fall to £3,000 (from £6,000).

The amount for trusts will fall to £1,500, subject to a minimum of £300 where shared across a number of trusts. 

State benefits

The Basic and New State pension and Pension Credit will increase by the May to July earns growth rate of 8.5% in April 2024. Other benefits increase by 6.7%.

ISAs

There were lots of changes for ISAs in the coming tax year, the main ones being:

• 16 to 17-year-olds no longer permitted to open cash-only adult ISAs;
• clients permitted to make multiple subscriptions each tax year to ISAs of the same type;
• partial transfers of ISA funds in-year between providers permitted; and
• innovative ISA expanded to include Long-Term Asset Funds and open-ended property funds with extended notice periods.

Trusts

It was announced in the Spring budget that the standard rate band would be abolished from 2024/25. Where the standard rate band would previously have applied:

• trusts with income of £500 or less will have no reporting requirement and will pay no tax;
• where income is greater than £500, trust rates will apply to ALL of the income (i.e. 39.35% for dividend income, 45% for all other income); and
• where a settlor has created more than one trust, the £500 is divided by the number of existing trusts, subject to a £100 minimum floor.

Estates

From 6 April 2024, there will be no income tax for estates where the income does not exceed £500. Where this is the case, any income paid to beneficiaries will be tax-free and no return will be required either. 

When will I be tested on the new rules?

The changes due to come in from the start of the new tax year will be examined as usual from the start of the new examinable tax year (1 September 2024).

We have been notified by the CII that the Class 1 National Insurance rate change from 6 January will be tested at the end of February.