Among the many talking points from Jeremy Hunt’s Autumn Statement was how his changes affect businesses, particularly small and medium-sized enterprises (SMEs). With the personal allowance frozen at ÂŁ12,570 until 2028, the additional income tax threshold reduced from ÂŁ150,000 to ÂŁ125,140 and the national living wage increased to ÂŁ10.42, the cost to entrepreneurs and small firm owners is vast.Â
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One area that slipped under the radar is changes to research and development (R&D) tax relief for SMEs and larger companies. SMEs, defined as companies with up to 250 employees, will see the “enhanced deduction” available to them decrease from 130% of qualifying R&D expenditure to 86%. Furthermore, the R&D payable cash tax credit will decrease from 14.5% to 10%.Â