On 30th October, Chancellor, Rachel Reeves delivered Labour’s first Budget since 2010. The Autumn Budget outlined several key changes that will impact businesses across the country. Here we breakdown those key measures for you to understand:
Increase in National Insurance Contributions:
From April 2025, the rate of employer National Insurance Contributions is set to rise from 13.8% to 15%. This will also coincide with a lowered threshold which will mean that employers become liable to pay National Insurance to £5,000 per employee rather than the current £9,100.
However, the Government also announced an increase in the Employment allowance (which allows smaller companies to reduce their NI liability) which will more than double (going from £5,000 to £10,500).
Minimum Wage Increase:
Also from April 2025, the legal minimum wage for over-21s will rise from £11.44 to £12.21 per hour. For employees aged between 18 – 20 years old, the minimum wage will go up from £8.60 to £10.00. The Government has made clear their long-term plan to create a single adult rate rather than the current aged-based system.
Income Tax Band Thresholds to Rise with Inflation After 2028:
The Government announced that they would not extend the current freeze on income tax band thresholds beyond the previously announced deadline of 2028. This means that, after 2028, we can expect to see Income tax bands rise in line with inflation which will prevent more people from being dragged into higher bands as wages rise.
Business Rates Relief for Retail, Hospitality & Leisure Businesses:
Retail, hospitality, and leisure businesses will see some relief through a 40% discount on business rates, capped at £110,000, along with a freeze on the small business multiplier. This support aims to ease financial strain for high street businesses facing mounting costs.
Corporation Tax Rate Frozen:
It was announced that the main rate of Corporation tax, paid by businesses on taxable profits over £250,000, will be capped at the current rate of 25% until the next election.
Green Energy:
In green energy, £3.9 billion will fund carbon capture and hydrogen projects, with increased levies on oil and gas profits to support this. While fossil-fuel-reliant businesses may face higher costs, those in the green sector will find new opportunities as the government prioritises sustainable energy.
Education Sector Boost:
Education and skills development are also a focus, with £300 million directed to further education and a reformed Apprenticeship Levy to give businesses more training flexibility. These investments are intended to address skill shortages and help businesses access a more qualified workforce.
Get in Touch:
The Autumn Budget 2024 presented both challenges and opportunities that will impact businesses across the country. If you have any questions about your business and how the budget will impact you specifically then get in touch with the team:
Tel: 01740 618 743
Email: info@teesglobal.co.uk
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