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2023 Autumn Statement and Scottish Budget

Autumn Statement

“A week is a long time in politics.”

A quote attributed to former Prime Minister, Harold Wilson in 1964, but still relevant today in the wake of the Autumn Statement delivered by Chancellor, Jeremy Hunt, on 22 November 2023.

Just a week ago political commentators and pundits were predicting that inheritance tax would be cut in the Autumn Statement; perhaps with some movement on corporation tax to boost investment, but that was it.

The Prime Minister trailed heavily, in a speech delivered at Lancaster House just 2 days before the Autumn Statement, that higher than anticipated tax receipts might have provided headroom for income tax cuts. Then, just a day later, National Insurance (“NI”) reductions were touted, because they cost less than income tax cuts as NI is only paid by those who work, and not pensioners for example.

So, what did we actually get?

Well, after a typical week in politics before a Chancellor’s speech, the Chancellor delivered NI cuts for both the employed and the self-employed, and confirmed that ‘full expensing’ for assets, introduced temporarily in April 2023, and which is effectively an enhanced capital allowance to encourage companies to invest, will be made permanent.

In a highly politicised arena, with the Autumn Statement and next Spring’s Budget being the only opportunities for the government to change its fortunes ahead of the next general election, the Chancellor focussed on a raft of initiatives designed to increase business investment and enhance productivity in order to stimulate further economic growth. But which measures should the automotive and fleet industries take most note of?

National Insurance

The main rate of Class 1 NI paid by employees will be reduced from 6 January 2024 from 12% to just 10%, delivering an annual saving of around £450 to the average employee’s net pay.

Many in the fleet industry will immediately think about the impact on salary sacrifice, but the reduction to savings available for basic rate taxpayers will be minimal compared to the the total NI savings they’ll make as a result of this announcement.

And let’s not forget that this measure will not affect the savings generated by UK resident higher or additional rate taxpayers, although some Scottish higher rate taxpayers will be affected due to the different income tax thresholds for Scottish taxpayers.

National Minimum Wage (“NMW”)

With the NMW being significantly uplifted to £11.44 per hour from 1 April 2024, which is equivalent to around £20,800 per annum for someone working 35 hours per week.

This is generally good news for the lower paid, but it could affect the ability of some employees to participate in salary sacrifice schemes.

Corporation tax relief - Full expensing

Full expensing offers enhanced capital allowances for qualifying plant and machinery; originally intended to be available for just 3 years the relief has been made permanent, but it should be borne in mind that whilst it applies to vans and lorries, cars continue to be excluded.

As they would ordinarily qualify as main rate expenditure vans and lorries will qualify for a 100% first year allowance, but a 100% balancing charge must be recognised on disposal, effectively adding the sales proceeds to taxable profits.

Special rate assets will be eligible for a 50% first year allowance, with a corresponding balancing charge recognised on disposal; the remaining expenditure on these assets qualifies for a 6% annual writing down allowance in the normal way.

Assets bought to lease continue to be excluded from any form of enhanced capital allowance. But hidden within the documents published alongside the Autumn Statement HM Treasury referred to its ongoing dialogue with a leasing industry working group, and its intention to publish a technical consultation to mitigate error and technical abuses in the hope that enhanced capital allowances can once again be made available to those that buy to lease.

In its own commentary on the Autumn Statement, the BVRLA said “The government is banking on permanent full expensing to unleash a wave of new business investment across the UK, but by excluding rental and leasing it is missing a massive opportunity. Our research shows that opening these powerful tax incentives up to the rental and leasing sectors could unlock an additional £1bn worth of investment into low and zero emission commercial vehicles. We will continue to work closely with HM Treasury and HMRC on their technical consultation and push for the unfair vehicle rental and leasing exclusion to be removed.”

Van benefit charge/Car and van fuel benefit charges

Ordinarily these are updated each year in line with inflation but in a surprise announcement the government has said they will be frozen at the current rates in 2024/25.

Vehicle Excise Duty (“VED”)

From 1 April 2024 VED for cars, vans and motorcycles will be uprated in line with inflation.

But to support the haulage industry VED for heavy goods vehicles (“HGVs”) and the HGV levy will be frozen at the current rates in 2024/25.

Fuel duty

No change was announced to the current, temporary 5ppl fuel duty cut. This will remain in place until March 2024, with no announcement expected about an extension until the Spring Budget is held.


On the face of it the 2023 Autumn Statement might seem to offer little to the fleet sector, but the announcement of a consultation on making the significant benefits of full expensing available to leasing companies is a huge step in the right direction and vindicates the BVRLA’s longstanding campaign to ensure that those who buy to lease are offered the same incentives as other taxpayers.

Scottish Budget

In the Budget delivered on 19 December 2023 the Scottish Finance Minister proposed a range of important income tax changes as outlined below:

  • The freezing of the Higher and Top rate income tax thresholds
  • Introduction of a new Advanced rate of income tax at 45% for those earning between £75,000 and £125,140
  • An increase of the Top rate of income tax, which applies to those earning more than £125,140, to 48%

If approved by the Scottish Parliament these changes will come into force from 6 April 2024; those living in Scotland will then be subject to 6 rates of income tax, ranging from 19% to 48%, on earned income, as well as an effective rate of 67.25% for those earning between £100,000 and £125,140.