Hunt made the ‘full expensing’ tax break, under which companies can deduct spending on IT, machinery and equipment from their profits, permanent. However, he ignored the Law Society’s campaign for the tax break to include law firms.
Nick Emmerson, president of the Law Society, said: ‘Our call for the scheme to be expanded to include all law firms has gone unheard.’
Emmerson added: ‘No new money was announced for a justice system crying out for investment despite it being in crisis with huge court backlogs, crumbling court buildings and a chronic shortage of lawyers and judges.’
Hunt also extended the 75% business rates discount for retail, hospitality and leisure firms for another year, cut the national insurance rate from 12% to 10% from January, and scrapped national insurance payments for self-employed people earning more than £12,570 from April, with 8% to be paid on profits between £12,570 and £50,270. He increased legal minimum wage by £1.02 to £11.44 an hour from April.
Lee McIntyre-Hamilton, employment tax specialist at Keystone Law said: ‘Many may see this as the chancellor simply giving with one hand and taking with another.
‘Employees and employers continue to be subject to substantially increased levels of tax and NIC due to the government’s previous decision to freeze tax and NIC thresholds until April 2028. Employers will be disappointed that the chancellor’s generosity towards employees has not been extended to employers. Employer NIC rates will remain the same.’
There was good news for the 1.7 million households in England who rely on housing benefit to pay the rent, more than half of whom have a shortfall between their rent and benefit, with recent rises in rents increasing incidences of homelessness. Hunt will unfreeze housing benefit from April 2024 to cover the bottom third of local rents. Homelessness charity Shelter chief executive Polly Neate welcomed the move and urged the Chancellor to bring the decision forward and unfreeze housing benefit immediately. Currently, more then 131,000 children are homeless and living in temporary accommodation in England.
STEP, the professional body for inheritance advisors, expressed disappointment there as no review of inheritance tax in the Chancellor’s Statement.
Emily Deane, head of government relations at STEP, said: ‘We urge the government to review it at the next possible opportunity, with the view to making it simpler, fairer and more effective.
‘Reform could be as simple as reducing the current 40% fixed rate, removing some of the reliefs, and abolishing potentially exempt transfers. A lower fixed rate alone would simplify the whole system thereby decreasing opportunities for avoidance and abuse.’
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