Budget 2024: what it means for businesses

Minimum wage

From April 2025, the minimum wage for:

  • over 21s will go up from £11.44 to £12.21 (£0.77 increase)
  • 18 to 20-year-olds will go up from £8.60 to £10 (£1.40 increase)
  • apprentices will go up from £6.40 to £7.55 per hour (£1.15 increase)

Employer National Insurance contributions

From 6 April 2025, the employer National Insurance contribution rate will be 15%.

The 2024 employer National Insurance contribution rate is 13.8%, which means employer contributions will rise by 1.2%.

In addition, the threshold at which businesses will start paying National Insurance will drop from £9,100 to £5,000.

What National Insurance is payable by employers is based on the employee’s earnings and deducted automatically through the pay as you earn (PAYE) system.

Employment Allowance

The Employment Allowance will increase from £5,000 to £10,500 and the £100,000 threshold will be removed.

The Employment Allowance allows eligible employers to reduce their National Insurance contributions.

Capital Gains Tax

The lower bracket of Capital Gains Tax will be increased from 10% to 18%.

The higher bracket of Capital Gains Tax will be increased from 20% to 24%.

Capital Gains Tax is payable when you ‘dispose’ of assets that have risen in value since you acquired them. The profit on an asset is taxable, not the total value of the asset.

Corporation Tax

Corporation Tax will be capped at its current rate of 25% for the duration of the Parliament.

Corporation Tax is a tax on a business’ profits, which can include the money it makes from trading, investments and selling assets for more than they cost.

Business rates in retail, hospitality and leisure

Business rates are sometimes called commercial rates. They are a tax that’s paid on

properties used for business.

Businesses in the retail, hospitality and leisure sectors will have a business rate discount of 40% up to a cap of £110,000 per business.

Fuel duty

Fuel duty will not rise next year.

Fuel duty is included in the price you pay for petrol, diesel and other fuels used in vehicles or for heating

Alcohol duty

Alcohol duty on non-draught drinks will increase in line with the retail price index (RPI) from February 2025. However, the duty on draught alcoholic drinks will be cut by 1.7%.

Inheritance Tax on agricultural assets

From April 2026, the first £1 million of combined business and agricultural assets will not be subject to any Inheritance Tax. For combined assets over £1 million, a 50% rate of Inheritance Tax will apply.

VAT and private schools

From January 2025, private schools will be subject to VAT. Currently, they are exempt.

In addition, in England, business rates charitable relief for private schools in England will be removed.

Electric company vehicles

The current company car tax rate on electric vehicles will be extended until 2028. This means electric car owners will continue to pay a different rate of tax than petrol and diesel car owners.

Analysis of the Autumn Budget 2024

The increase to minimum wage rates will likely increase the wage bills for a lot of businesses and be a point of concern. However, very small businesses are somewhat protected by the Employment Allowance increase. This increase means a business can employ 4 full-time workers on the National Living Wage without having to pay any National Insurance.

The Chancellor said that the government aims to, over time “create a single adult wage rate”, so this will be something to watch out for.

Businesses in the leisure, tourism and hospitality sectors can look forward to a few extra protections. The alcohol duty on draft alcohol drinks equates to about a penny off each pint, which will probably be well received by businesses and customers.

Keep track of changes that affect you

Our specialist experts keep track of all spending plans and legislation relevant to businesses. We share updates with our clients through emails, webinars, and articles and templates on rradarstation – our online knowledge portal.

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