What the Autumn Statement means for you and your money
Individual Savings Accounts (ISAs)
One of the most considerable shake-ups of ISA rules for many years. Significant changes are coming to Individual Savings Account (ISA) rules. From 6 April 2024, savers and investors will have more freedom to pay into more than one of each type of ISA annually.
This is considered one of the most considerable shake-ups of ISA rules for many years. The new rules are designed to provide further flexibility, enabling savers and investors to move between different providers. By allowing multiple subscriptions to ISAs of the same type every year, the government aims to stimulate competition among providers.
This will increase flexibility and choice and support the development of long-term investment products.
Allowing multiple ISA subscriptions – The government will allow multiple subscriptions to ISAs of the same type every year starting 6 April 2024.
Allowing partial transfers between providers – Partial transfers of ISA funds are allowed between providers starting 6 April 2024.
Removing the requirement to reapply for an existing ISA annually – Removal of the requirement to reapply for an existing dormant ISA from 6 April 2024.
Expanding the Innovative Finance ISA to include Long-Term Asset Funds – Long-Term Asset Funds to be permitted investments in the Innovative Finance ISA from 6 April 2024.
Expanding the Innovative Finance ISA to include open-ended property funds with extended notice periods – Open-ended property funds with extended notice periods are to be permitted investments in the Innovative Finance ISA from 6 April 2024.
Allowing certain fractional shares contracts as a permitted investment – Certain fractional shares contracts are to be allowed as eligible ISA investments (the government will engage with stakeholders on implementation).
Digitalise the ISA reporting system – Digitalisation of the ISA reporting system to enable the development of digital tools to support investors announced.
Harmonise ISAs to those over 18 years of age – The government will harmonise the account opening age for any adult ISAs to 18 from 6 April 2024.
ISA, JISA, LISA & CTF Annual Limits – Individual Savings Account (£20,000), Junior Individual Savings Account (£9,000), Lifetime Individual Savings Account (£4,000 excluding government bonus) and Child Trust Fund (£9,000) limits frozen at their current levels for 2024/25.
Other Personal Tax and Savings announcements
Lifetime Allowance (LTA) Abolition
The government will legislate in the Autumn Finance Bill 2023 to remove the LTA. The measure will clarify the taxation of lump sums and lump sum death benefits, the application of protections and the tax treatment for overseas pensions, transitional arrangements and reporting requirements. This will take effect from 6 April 2024.
Uprating Blind Person’s Allowance and Married Couple’s Allowance for 2024/25
The government will uprate the Blind Person’s Allowance (BPA) and the Married Couple’s Allowance (MCA) by the September CPI figure of 6.7% in 2024/25. The BPA will be valued at £3,070, and the MCA will be valued at between £4,280 and £11,080. This decision represents no policy change, as it confirms the default position for these allowances to be uprated by CPI, as set out in the Income Tax Act 2007.
National Insurance contributions rates and thresholds
The government will freeze the Lower Earnings Limit (LEL) and the Small Profits Threshold (SPT) at 2023/24 levels in 2024/25. For those paying voluntarily, the government will also freeze Class 2 and Class 3 National Insurance contribution (NIC) rates at their 2023/24 levels in 2024/25. The LEL will remain at £6,396 per annum (£123 per week), and the SPT will remain at £6,725 per annum. The main Class 2 rate will remain at £3.45 per week, and the Class 3 rate will remain at £17.45 per week. This will not affect existing arrangements for payments of voluntary Class 2 or Class 3 NICs connected with previous tax years.
Extending the Employer NICs relief for employment of veterans
The government is extending the NICs relief for employers of eligible veterans for one year. The relief means businesses pay no employer NICs on annual earnings up to £50,270 for the first year of a qualifying veteran’s employment in a civilian role.
Announcement of future guidance changes to tax relief for self-employed
The government announced that HM Revenue & Customs will rewrite guidance around the deductibility of training costs for sole traders and the self-employed. This measure will clarify the guidance to ensure that individuals can be confident that updating existing skills, maintaining pace with technological advances or changes in industry practices are allowable costs when calculating the taxable profits of a business.
Simplifying Making Tax Digital for Income Tax Self Assessment
The government is announcing the outcome of the review of the impact of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) on small businesses. This includes maintaining the current MTD threshold at £30,000 and design changes to simplify and improve the system. These changes will take effect from April 2026. The government is also legislating in the Autumn Finance Bill 2023 to ensure taxpayers who join MTD from 6 April 2024 are subject to the government’s new, fairer penalty regime for the late filing of tax returns and late payment of tax.
Response to consultation on taxation of environmental land management and ecosystem service markets
In Spring Budget 2023, the government launched a consultation on the taxation of environmental land management and ecosystem service markets. This closed on 9 June 2023. The government is reviewing responses to this consultation and will give a further update in Spring 2024. n