Autumn Statement 2023: what does it mean for museums?

The chancellor Jeremy Hunt delivered the Autumn Statement 2023 this week – one of the UK Government's final budget statements before next year’s general election.  

The government says it is focusing on five areas: reducing debt; cutting tax and rewarding hard work; backing British business; building domestic and sustainable energy; and delivering world-class education.

Cultural tax reliefs

While there was no specific mention of museums in the Autumn Statement itself, a policy document released alongside the announcement outlines administrative changes to cultural tax reliefs, including the Museums and Galleries Exhibition Tax Relief.

Organisations claiming the tax reliefs will be required to complete and submit an online information form in order to streamline the process of making a claim and assist companies in transitioning to new expenditure credit regimes, which are also being implemented.

Further administrative changes will be introduced to correct anomalies and prevent abuse.

The changes in relation to the cultural reliefs, including mandatory use of the of the online information form, will come into effect from 1 April 2024.

The government is also proposing to clarify some of the cultural relief rules, including what is eligible, to provide clarity to the industry and ensure the fairness and success of the reliefs.

Legislative changes will be made to clarify that costs incidental to production are excluded from the relief, and to require physical admission to exhibitions.

Workforce

Some of the general measures announced in the statement also have implications for the museum sector.

Freelance museum workers will benefit from cuts in National Insurance contributions. From 6 April 2024, self-employed people with profits above £12,570 will no longer be required to pay Class 2 National Insurance Contributions, while the main rate of Class 4 self-employed NICs will be cut from 9% to 8%.

The government says the changes will benefit around two million self-employed people, with the average person earning £28,200 seeing a saving of £350 in 2024-25.

Meanwhile from next April, the National Living Wage (NLW) will increase by 9.8% to £11.44 with the age threshold lowered from 23 to 21 years old. The government says this represents an increase of over £1,800 to the annual earnings of a full-time worker on the NLW and is expected to benefit over 2.7 million low paid workers.

This increase brings it close to the voluntary Real Living Wage rate of £12 (outside London), but it is still some way off the RLW recommended rate of £13.15 for workers in London.

Business rates

The chancellor announced that business rates for properties with a rateable value of up to £51,000 would be frozen next April rather than increasing in line with inflation. He also announced that a temporary reduction in bills for retail, hospitality and leisure businesses of up to 75% would be extended for one year.

Public spending

The Autumn Statement confirms that most government departments will feel the pinch of flat spending combined with high inflation. The government has reaffirmed its commitment to “a responsible approach to public spending to keep debt falling”. This means making no new funding available for public services outside of committed areas including the NHS, defence and education.

Day-to-day spending is now due to rise by only 1.9% per year in real terms between 2021/22 and 2024/25, compared to 3.6% when the settlements were first agreed in the comprehensive spending review of 2021.

The statement says: "The government has taken difficult but necessary decisions to get debt falling and ensure our public services continue to operate effectively in the face of financial and operational pressures."