Going into the Autumn Statement, Chancellor Jeremy Hunt knew he needed to make an impact as the fate of the nation, and his own party’s electoral prospects rested on his 110 measures for business.

In delivering his “Autumn Statement for growth”, the Chancellor made several pledges that he said were designed to help those struggling with the cost-of-living crisis.

Against a backdrop of falling inflation and a fiscal buffer of up to £25 billion, thanks to HM Revenue & Customs (HMRC) growing tax receipts from rising incomes and frozen tax rates, Jeremy Hunt launched into a speech to Parliament full of tax cuts.

For sole traders and self-employed individuals, the Chancellor announced the elimination of Class 2 National Insurance Contributions (NICs).

Presently, self-employed people earning above £12,570 are required to pay a fixed weekly rate for Class 2 NICs, which was slated to increase to £3.70 from 6 April 2024. Additionally, the Class 4 NIC main rate will be reduced from 9% to 8%, further benefiting self-employed individuals.

Regarding pensions, the Government will maintain the Triple Lock, ensuring that the basic State Pension, the new State Pension, and the Pension Credit standard minimum guarantee for 2024-25 align with the average earnings growth of 8.5%.

The Government also plans to tackle the issue of “small pot” pensions by considering a lifetime provider model, which would allow pension contributions to be transferred to an existing pension scheme when changing employers.

This model aims to offer individuals greater control and insight into their pensions. Jeremy Hunt has proposed consulting on giving pension savers a legal right to direct new employers to contribute to their existing pensions, potentially adding an extra £1,000 a year in retirement for an average earner starting savings from age 18.

Finally, as previously indicated, the Government intends to abolish the Lifetime Allowance in the Autumn Finance Bill 2023, with this change taking effect from 6 April 2024.

However, beyond his speech, there was a critical measure hidden within the Autumn Statement documents, which marks a substantial change to the ever-important IR35 rules.

The document revealed that the issue of “double taxation” under IR35 regulations will finally be addressed.

The document says: “The government will legislate in the Autumn Finance Bill 2023 to allow HMRC to reduce the PAYE liability of a deemed employer to account for taxes paid by a worker and their intermediary on payments received where an error has been made in applying the off-payroll working rules.”

This form of “double taxation” typically arises when there is an incorrect determination of IR35 status. In such cases, HMRC attempts to recoup the tax liability from the party paying the fee.

However, this calculation does not consider the taxes already paid by the contractor, leading to HMRC collecting additional revenue.

Rectifying this issue will simplify the complexities associated with off-payroll rules and decrease the financial risk for end-clients and fee-paying parties engaging contractors.