2023年度英国秋季财政预算案（英）-德勤

22November2023

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AutumnStatement2023

Contents

Introduction

1

Businesstax

2

R&Dandotherinvestmentincentives

3

Industryspecificmeasures

4

EmploymenttaxesandNationalInsurance

5

Othertaxmeasures

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1.Introduction

TheChancelloroftheExchequer,JeremyHunt,todaydeliveredtheUK’s2023AutumnStatement.

Againstabackdropoffallinginflationandbelow-forecastborrowingfigures,theChancellorsought

toencouragebusinessinvestmentthroughapackageoftargetedtaxcutsandinvestmentincentives,

whilefocussingbroadermeasuresonindividualsandtheself-employed.

Businesstaxdevelopmentsincludepermanent‘fullexpensing’forcapitalinvestmentandthe

abolitionofrulesrelatingtothetaxationof‘OffshoreReceiptsinrespectofIntangibleProperty’.

HeadlinegrabbingreformsoftheUK’sNationalInsuranceContributionregimewilllargelyimpactthe

self-employedandindividuals,butUKemployerswillberequiredtoadministerareductioninthe

mainNICrateforemployeesfrom12%to10%witheffectfrom6January2024.

InrelationtotheintroductionofPillar2legislation,theGovernmentintendstoapplytheUndertaxed

ProfitRulefrom2025,butwill“continuetomonitor”internationalimplementation.

Thisbulletinsetsoutthekeytaxmeasuresfornon-UKownedcorporategroups.Fordetailed

coverageandcommentontheAutumnStatement2023,visitDeloitteUK’sdedicatedwebsite

here.

2.Businesstax

2.1Fullexpensingofcapitalexpenditure

InSpringBudget2023,theGovernmentintroduced‘fullexpensing’forqualifyingcapitalexpenditure

incurredbetween1April2023and1April2026.TheGovernmenthasnowannounced,asexpected,

thatfullexpensingwillbemadepermanent.

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Underthefullexpensingrules,companiescanclaim100%first-yearcapitalallowancesforqualifyingplantandmachineryexpenditure,anda50%first-yearallowanceforqualifyingspecialrateassets.Cars,assetsforleasingandsecond-handassetscontinuetobeineligibleforthisrelief.However,theGovernmentisexploringthecaseforexpandingthescopeoffullexpensingtoincludeassetsforleasingandwillpublishatechnicalconsultationinduecourse.

Whilethisannouncementwaswidelyanticipated,itremainswelcomenewsforcompaniesandshouldprovidegreatercertaintyinplanninglong-terminvestments,forexampleindecarbonisationtechnologyorinnewer,greenerplantandmachinery.TheChancellordescribedthischangeasthe“biggestbusinesstaxcutinmodernBritishhistory”andtheGovernmentforecaststhatthenewpermanentmeasurewillbenefittaxpayersbyanaverageof£10bnperyear.

TheGovernmentalsoannouncedthatitwilllaunchatechnicalconsultationonwiderchangestosimplifytheUK’scapitalallowanceslegislationinduecourse.

2.2RepealofUKORIPrules

TheGovernmenthasannouncedthatitwillrepealtheOffshoreReceiptsinrespectofIntangibleProperty(ORIP)rulesinrespectofincomearisingfrom31December2024.

TheORIPruleswereimplementedin2019todiscouragemultinationalgroupsfromplacingintangiblepropertyinlowtaxjurisdictionswhereincomeissubjecttonooralowrateoftax.

TherepealoftheORIPruleswillcoincidewiththeintroductionofthePillar2UndertaxedProfitsRule,whichtheGovernmentconsiderstomorecomprehensivelydiscouragethebehavioursthatORIPsoughttocounteract.

WhilstanyincomewhichwassubjecttoORIPwillnowpotentiallybesubjecttotheUndertaxedProfitsRule,therepealisawelcomesimplificationoftheUKtaxregime.

2.3PillarTwo

TheGovernmentintendstointroducetheUndertaxedProfitsRule,whichformspartoftheG20-OECDglobalminimumtaxframeworkonPillar2,inanupcomingFinanceBill,totakeeffectforaccountingperiodsbeginningonorafter31December2024.

TheGovernmentnotedinthedocumentspublishedimmediatelyaftertheChancellor’sspeechthat“itisimportantthattheUKimplementsPillar2toasimilartimelineasothercountries”andthatthe“Governmentwillcontinuetomonitorinternationaldevelopmentsonimplementation”.

TheGovernmentwillalsomaketechnicalamendmentstotheMultinationaltop-uptaxandDomestictop-uptaxlegislationthroughtheAutumnFinanceBill2023.TheMultinationaltop-uptaxandDomestictop-uptaxwereintroducedintheFinance(No.2)Act2023.TheproposedchangesarecomprisedofamendmentsidentifiedfromstakeholderconsultationandthosenecessarytoensurethatUKlegislationremainsconsistentwithadministrativeguidancetothePillar2modelrulesagreedbytheUKandothermembersoftheOECDInclusiveFramework.

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3.R&Dandotherinvestmentincentives

3.1MergerofR&Dtaxreliefs

TheGovernmenthasconfirmedthatitwillproceedwithmergingthetwoUKR&Dregimes,theSMEandtheResearchandDevelopmentExpenditureCredit(RDEC)schemes,intooneconsolidatedscheme.Themergingofthetwoschemeswasexpected,followingearlierannouncementsincludedinSpringBudget2023.

Underthemergedscheme,allclaimantswillnowreceivereliefviaanabove-the-line,taxablecreditatthecurrentRDECrateof20%.Loss-makingcompanieswillsufferalowernotionaltaxchargeof19%,deliveringanetbenefitof16.2%onqualifyingspend,slightlyhigherthanthe15%effectivereliefavailabletotax-payingclaimants.

FurtherannouncementsrelatetotheabilitytoclaimRDECforcontracted-outR&D,subsidisedexpenditureandexternallyprovidedworkers(EPW).IthasbeenclarifiedthatpaymentofanRDECcreditmustbemadetotheclaimantcompanygoingforward,andthatnonewassignmentsofRDECcreditstonomineecompanieswillbepossible.

ThemergedschemewillbeincludedintheAutumnFinanceBill2023andwillapplyforaccountingperiodsbeginningonorafter1April2024.Thisisaslightchangefromearlierplans,whichwereforthemergedschemetoapplyforexpenditureincurredafter1April2024.Thischangeshouldremovesomecomplexity,ascompanieswillnotberequiredtosplitanaccountingperiodintotwonotionalperiodstoapplythemergedandunmergedschemes.

Overall,whiletheGovernmenthassoughttosimplifytheR&Dtaxreliefsthroughtheimplementationofamergedscheme,claimantswillstillneedtomanagecomplexnuances.Whilelarge,profitablebusinessesmaynotmateriallybenefitfromthesechanges,loss-makingcompaniesandSMEsmaydoso.

3.2AdditionaltaxreliefforR&Dintensiveloss-makingSMEs

NotwithstandingthattheGovernmentwillintroduceamergedscheme,someruleswillremainspecificallyrelevanttoSMEclaimants.Forexample,loss-makingSMEswhichmeetthethresholdtobeconsidereda‘researchanddevelopmentintensivebusiness’(RDIB)willbeabletoclaimtherepayabletaxcreditatahigherrateof14.5%,equivalenttoupto27pinthepound.TheGovernmenttodayannouncedachangetothe‘R&Dintensityratio’,whichiscalculatedbasedonqualifyingR&Dexpenditureasapercentageoftotalexpenditure.Businesseswithan‘R&Dintensityratio’ofatleast30%(previously40%)willbeeligiblefortheadditionalrelief.

AgraceperiodwillapplytoprovidemorecertaintyforcompanieswhofallundertheRDIBthreshold,allowingthemtomaintaintheirstatusfortwoconsecutiveperiods.

ForRDIBs,aclaimforqualifyingexpenditureincurredfrom1April2023canbemadeoncetheAutumnFinanceBill2023hasreceivedRoyalAssent.ThereductionintheR&Dintensityratioandthegraceperiodwillcomeintoeffectforaccountingperiodsbeginningonorafter1April2024.

3.3InvestmentZonesandFreeports

TheGovernmenthasannouncedplanstoextendtheInvestmentZonesprogrammeoriginallyannouncedattheSpringBudget2023,fromfivetotenyears.ThemeasureswillthereforeextendthebenefitsavailableinEnglishFreeportsupto30September2031,andwilldoublethefundingandtax

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reliefsavailableineachInvestmentZonefrom£80millionto£160millionoverthedurationoftheprogramme.TheGovernmenthopesthatbyextendingthedurationoftheprogramme,theywillprovidegreatercertaintytoinvestors.

FournewInvestmentZoneswereannouncedinEngland,inGreaterManchester,theWestMidlands,theEastMidlands,andWrexham.

InvestmentZonesacrosstheUKwerefirstintroducedwiththegoalofsupportinghigh-growth,strategicindustriesinareasinneedoflevelling-uptoincreaseproductivityandgrowth.TheincentivesineachZoneincludeenhancedratesofStructuresandBuildingsAllowances;StampDutyLandTaxrelief;BusinessRatesrelief;andEmployerNationalInsuranceContributionsrelief,alongsideflexiblegrantfunding.

TheGovernmentalsoannouncedthatitwasextendingthedurationofthetaxreliefsavailableinFreeportsfromfivetotenyearstomaximisetheprogramme’simpact,andiscreatinganew£150millionInvestmentOpportunityFund,whichwillbeavailableoverfiveyearstoensurethatInvestmentZonesandFreeportscanrespondnimblyasinvestmentopportunitiesarise.

4.Industryspecificmeasures

4.1CreativeIndustriesandAudio-Visualtaxrelief

InSpringBudget2023,theGovernmentannouncedanewAudio-VisualExpenditureCredit,whichwilloffera34%refundabletaxcreditforfilmandhigh-endTVproduction.Thisreplacesanumberofpreviouslyseparatereliefs.

TheGovernmentannouncedatAutumnStatementthatitwillseektofurtherboosttheinternationalcompetitivenessoftaxincentivesbyconsultingwithstakeholderswithaviewtoincreasingthegenerosityofthisschemeforvisualeffectsexpenditurefromApril2025.

Aspreviouslyannounced,upliftedreliefforanimatedTVproductionwillbeextendedtoincludeanimatedfeaturefilms,whichwillbenefitfroma5%uplift(upto39%)inreliefundertheAudio-VisualExpenditureCredit,alongwithchildren’sTV.

Separately,asannounced,theVideoGamesTaxReliefwillbereplacedbytheVideoGamesExpenditureCredit,alsoatarateof34%.

Thenewreliefswillbeavailabletoclaimfrom1January2024,andtheGovernmentintendsthattheywillconstituteQualifiedRefundableTaxCreditsforthepurposesofPillar2legislation.

4.2Investmentforothersectors

TheGovernmentcontinuedarecenttrendofannouncingtargetedmeasuresdesignedtoincentiviseinvestmentinspecificindustriesandsectorsthatareconsideredtobeimportanttothefuturesuccessoftheUKeconomy.

AtAutumnStatement,thisincludedfundingof£4.5bntohelpunlockprivateinvestmentinstrategicmanufacturingsectors,overafive-yearperiodstartingin2025-26,includingtheUK’sspacesector,lifesciences,greenindustries,andaerospace,withanadditional£500millioninfundingfor‘computeforAI’overthenexttwofinancialyears.

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5.EmploymenttaxesandNationalInsurance

5.1ChangestoClass1employeeNICs

TheGovernmenthasannouncedthatitwillcutthemainrateofClass1employeeNationalInsuranceContributions(NICs)from12%to10%.Thiswillprovideataxcutfor27millionemployeeswiththeaverageworkeron£35,400receivingataxcutin2024-25of£450.Followingthechange,thecombinedrateofUKincometaxandNICsforanemployeepayingthebasicrateoftaxisnow30%–thelowestsincethe1980s.

Thechangewilltakeeffectfrom6January2024,givingemployersandtheirpayrollproviderslimitedtimetoadministerthechangespart-waythroughtheUKincometaxyear.

5.2Reformofself-employedNICs

Inanannouncementwhichwillgrabtheheadlinesfortheself-employed,theGovernmentannouncedthatClass2NICsfortheself-employedwillbeabolishedfrom6April2024.ThischangeisanotherexampleoftheGovernmentseekingtosimplifyareasoftheUKtaxsystemintheannouncements.

TheGovernmentwillsetoutnextstepsonhowtoimplementthisClass2reforminthenewyear.

ThemainrateofClass4self-employedNICswillalsobereducedfrom9%to8%from6April2024.Thisisexpectedtobenefitaround2millionUKindividuals.

5.3IR35

Followingconsultation,theGovernmenthasannouncedthatbusinessesthataresubjecttotheIR35rulesasa‘deemedemployer’willbepermittedtooff-setcertaintaxespaidinrelationtothearrangementfromanyPAYEobligationsowedinrespectofadeemedemployerliability.

Off-setwillnotbeavailableinrelationtoemployerNICspaidbyanypersonalservicecompanies(PSCs)onsalarypaidtotheworker,orforincometaxorNICpaidbyanyotheremployees,directors,orshareholdersofthePSC.

Thechangeswillprovidewelcomerelieftoanypublicsectorormedium/largeprivateorganisationswithoff-payrollworkerswhoarefoundtohavebeenincorrectlydeterminedasself-employed.

LegislationwillbeenactedinAutumnFinanceBill2023totakeeffectfrom6April2024,andwillapplytodeemeddirectpaymentsmadefrom6April2017,wheresettlementhasnotalreadybeenreached.

6.Othertaxmeasures

6.1Businessrates

TheGovernmenthasannouncedfurtherbusinessratebenefitstobothsmallbusinessesandthoseintheretail,hospitality,andleisureindustries.

Specifically,theGovernmentannouncedthatthesmallbusinessmultiplierinEnglandwillbefrozenforafourthconsecutiveyearat49.9p.Largerbusinesseswillnotbenefitfromthisannouncement,asthestandardmultiplierforlargerbusinesswillbeupratedinlinewithinflationto54.6p.

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Thecurrent75%reliefavailableforeligibleRetail,HospitalityandLeisure(RHL)propertieswillbeextendedfortaxyear2024-25.RHLpropertiesinEnglandwillbeeligibletoreceivesupportuptoacashcapof£110,000perbusiness.

6.2Promotersoftaxavoidanceschemes

TheGovernmentislegislatingtointroducetougherconsequencesforpromotersoftaxavoidanceschemes.Themeasureswillincludeanewcriminaloffenceforpromoterswhocontinuetopromotetaxavoidanceafterhavingreceivedanoticetostop,aswellasanewpowerthatwillenableHMRCtoapplytothecourttodisqualifydirectorsofcompaniesinvolvedinpromotingtaxavoidance.

Authors

Reading-ChristieBuck

Reading-AndrewSurrell

Reading-JonnyTatham

Tel:+441183222525

Tel:+441183222021

Tel:+441183222951

Email:cbuck@deloitte.co.uk

Email:asurrell@deloitte.co.uk

Email:jptatham@deloitte.co.uk

Contacts

TaxPolicy-AmandaTickel

London-SarahHeselton

Manchester-StephenNuttall

Tel:+442073033812

Tel:+441727885833

Tel:+441614558573

Email:ajtickel@deloitte.co.uk

Email:sheselton@deloitte.co.uk

Email:stephennuttall@deloitte.co.uk

London-GeoffBrand

London-SimonCooper

Gatwick-TimMatthews

Tel:+442070072251

Tel:+442070070982

Tel:+441293761298

Email:geoffreybrand@deloitte.co.uk

Email:sjcooper@deloitte.co.uk

Email:timatthews@deloitte.co.uk

London-ZubinPatel

Leeds-NickMarsden

Bristol-Ada