Understanding the Autumn Statement: The Economic Impact

Dominic Tayler, Managing Director – UK at Oakglen Wealth, offers insights on the 2023 Autumn Statement delivered yesterday by the Chancellor, Jeremy Hunt.

The focal point of the Autumn Statement was the larger than expected cut in National Insurance, with the main rate going down from 12% to 10% in January. Whilst this is a positive development, it’s essential to highlight that the freezing of income tax bands since April 2021 has not only adversely affected more individuals but has also functioned as a significant revenue source for the government. The Office of Budget Responsibility (OBR) anticipates a considerable increase in tax receipts – see below.


Source: The Office of Budget Responsibility (OBR)


One final point to add on this is that the analysis of the OBR’s data suggests that the percentage of the nation’s income being paid in tax is set to rise to its highest level in 70 years.

Savers found little to celebrate, as the savings tax rate bands retained their status quo. However, the Chancellor announced that changes will be made to simplify ISAs and widen the scope of investment that can be included in them from 6 April 2024. These adjustments will allow savers to pay into multiple ISAs of the same type in one year, as well as allowing partial transfers between providers.

Further changes include the ability to invest in fractional shares, open-ended property funds, and long-term asset funds. So-called LTAFs are a new type of fund that invest in illiquid assets such as infrastructure and private equity. Despite these changes, there was a sense of disappointment, particularly as a more extensive overhaul of ISAs had been expected. The ISA allowance remains at £20,000, a level maintained since 2017/2018. This is a space to monitor in anticipation of the Spring 2024 Budget, especially with a general election on the horizon.

Notably absent were changes to inheritance tax bands, leading us to speculate that the Chancellor might be reserving significant measure for the upcoming Spring 2024 Budget.

From an investment perspective, we received encouraging updates regarding sunset clauses for both the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) schemes, as it was announced that these will be extended to 6 April 2025 to 6 April 2035. Additionally, adjustments were made to the rules for Real Estate Investment Trusts, aiming to enhance the overall competitiveness of the regime. Despite the Chancellor not mentioning this during his speech, we also had changes to stamp duty reserve tax (SDRT) relief, with the threshold on shares that qualify for this relief increasing from £170M to £450M.

Businesses received a boost with the announcement that they can heavily capitalise spending for the foreseeable future. This initiative, permitting companies to deduct capital spending from taxable profits, was initially due to expire in 2026. The £11bn measure is poised to effectively reduce companies’ tax by 25p for every £1 spent on plant and machinery.

The Chancellor used his Commons speech to claim that the halving of inflation and a reduction in borrowing has put the UK economy “back on track”. As such, he had room to cut taxes as the government seeks to boost economic growth in the lead up to the general election. Regarding business taxes, the Chancellor declared that he has “delivered the biggest business tax cut in modern British history”.

The Chancellor’s ability to implement these tax cuts can largely be attributed to the positive impact of inflation on tax revenues, which has, thus far, outweighed the challenges posed by higher interest rates on debt payments. The OBR now forecasts inflation at 3.6%, whilst seeing GDP growth of 0.6%.

In summary, we anticipate that the tax cuts will be well received, although there is a palpable sense of disappointment that they did not go far enough. It remains to be seen whether the Chancellor’s Autumn Statement had been influenced by the Kwasi Kwarteng Mini-Budget last year, suggesting a reluctance to push tax cuts too far, or if he is strategically reserving further fiscal measures for the Spring 2024 Budget.

Click here to connect with Dominic on LinkedIn Contact Dominic >

Dominic Tayler
Managing Director - UK


This document is distributed by Oakglen Wealth Limited and / or Oakglen Wealth (Jersey) Limited (hereafter “Oakglen”) to you for your information and discussion only. Unless otherwise stated nothing in this document constitutes investment, legal, accounting, real estate, conveyancing, surveying or tax advice, or a representation that any investment is suitable or appropriate to your individual circumstances, or otherwise constitutes a personal recommendation to you. It is not a solicitation or an offer to buy or sell any security or other financial instrument. Any information including facts, opinions or quotations, may be condensed or summarised and is expressed as of the date of writing. The information may change without notice and Oakglen is under no obligation to ensure that such updates are brought to your attention. The price and value of investments and any income that might accrue could fall or rise or fluctuate. The price of shares and income from them may fall as well as rise and is not guaranteed. You may not get back the amount of your original investment. A change in the economic environment, possible changes in the law and other events may cause future performance to deviate from that expressed or implied in this document. Please note that past performance, simulations and forecasts are not a reliable guide to future returns. If an investment is denominated in a currency other than your base currency, changes in the rate of exchange may have an adverse effect on value, price or income. Investing in Packaged Retail and Insurance-based Investment Products (PRIIPs) carries a high level of risk and may not be suitable for all investors.

Any information provided by a client and used to produce this document will have been checked by Oakglen for plausibility only and the client notified accordingly of any obvious anomalies. This document and any related recommendations or strategies may not be suitable for you; you should ensure that you fully understand the potential risks and rewards and independently determine that it is suitable for you given your objectives, experience, financial resources and any other relevant circumstances. You should consult with such adviser(s) as you consider necessary to assist you in making these determinations. The opportunities and risks associated with each investment product can be found in the relevant underlying securities prospectus and any other supplementary documents. All documents will be made available at any time upon request.

Oakglen does not advise on the tax consequences of investments, and you are advised to contact a tax adviser should you have any questions in this regard. The levels and basis of taxation are dependent on individual circumstances and are subject to change. This document may relate to investments or services of an entity/person outside the United Kingdom, or to other matters which are not regulated by the Financial Conduct Authority, or in respect of which the protections of the Financial Services Compensation Scheme. Further details as to where this may be the case are available on request in respect of this document. Additionally, this document may relate to investments or services of an entity/person outside Jersey, or to other matters which are not regulated by the Jersey Financial Services Commission, or in respect of which the protections of the Jersey Financial Services Commission for retail clients. Further details as to where this may be the case are available on request in respect of this document.

This document has been prepared from sources Oakglen believes to be reliable, but we do not guarantee its accuracy or completeness and do not accept liability for any loss arising from its use. Oakglen reserves the right to remedy any errors that may be present in this document. Oakglen, its affiliates and / or their employees may have a position or holding, or other material interest or effect transactions in any securities mentioned or options thereon, or other investments related thereto and from time to time may add to or dispose of such investments.

This document is intended only for the person to whom it is issued by Oakglen. It may not be reproduced either in whole, or in part, without our written permission. The distribution of this document and the offer and sale of the investment in certain jurisdictions may be forbidden or restricted by law or regulation. This communication does not constitute the solicitation of an offer to purchase or subscribe for any investment or service in any jurisdiction where, or from any person in respect of whom, such a solicitation of an offer is unlawful.

Investments may have no public market or only a restricted secondary market. Where a secondary market exists, it is not possible to predict the price at which investments will trade in the market or whether such market will be liquid or illiquid. As such, for investments not listed or traded on any exchange, pricing information may be more difficult to obtain, and the liquidity of the investments may be adversely affected. A holder may be able to realise value prior to an investment’s maturity date only at a price in an available secondary market. The issuer of the investment may have entered into contracts with third parties to create the indicated returns and/or any applicable capital protection (in part or in full). The investment instrument's retention of value is dependent not only on the development of the value of the underlying asset, but also on the creditworthiness of the Issuer and / or Guarantor (as applicable), which may change over the term of the investment instrument. In the event of default by the issuer and/or Guarantor of the investment, and / or any third party the investment any income derived from such contracts is not guaranteed and you may get back none of, or less than, what was originally invested. Parties other than the Issuer or Guarantor (as appropriate) mentioned in this document (for instance the Lead Manager, Co-structurer, Calculation Agent or Paying Agent) do neither guarantee, repayment of the invested capital nor financial return on the investment product, if nothing is indicated to the contrary. Any capital protection given is usually an inherent part of the product; provided through the use of options, futures or other derivative products. You may have to accept smaller returns on an investment relative to a direct investment in the underlying index, basket, etc. because of the costs involved in providing the capital protection. Such capital protection normally only applies if the investment is held until maturity. The amount of initial capital to be repaid may be geared, which means that a fall in the underlying index or securities may result in a larger reduction in the amount repaid to investors. Alternative investments, derivatives or structured products are complex instruments that typically involve a high degree of risk and are intended for sale only to investors who are capable of understanding and assuming the risks involved. Structured products carry counterparty risk, in that in the event of default by the issuer you may lose some or all of your capital invested even when the product carries capital guarantees. Where this document relates to emerging markets, such investments should be made only by sophisticated investors or experienced professionals, who have independent knowledge of the relevant markets, are able to consider and weigh the various risks presented by such investments and have the financial resources necessary to bear the substantial risk of loss of investment in such investments.

The services described are provided by Oakglen or by its subsidiaries and/or affiliates in accordance with appropriate local legislation and regulation. Certain products and services may not be available in all locations or to all Oakglen clients.

Data Source: Oakglen Wealth (Jersey) Limited and Oakglen Wealth Limited, otherwise specified.

Oakglen is a registered business name of Oakglen Wealth (Jersey) Limited and Oakglen Wealth Limited.

Oakglen Wealth (Jersey) Limited is regulated in Jersey by the Jersey Financial Services Commission for the conduct of Investment Business and is a limited company with company number 121454, incorporated in Jersey on 7 June 2016. Its business address is 4th Floor, 1 IFC, St Helier, Jersey, JE2 3BX.

Oakglen Wealth Limited is authorised and regulated by the Financial Conduct Authority. The registered address of Oakglen Wealth Limited is 2 St James’s Market, 7th Floor, London, United Kingdom, SW1Y 4AH and is registered in England and Wales with number 13182724.