Autumn Budget 2024 - Impact on Businesses

On 30th October 2024, Chancellor Rachel Reeves presented the Autumn budget. With a lot of anticipation and rumours ahead of the budget, here is a summary of the big announcements that are relevant to small businesses.

• National Minimum Wage for workers aged over 21 will rise by 6.7% from the 1st April 2025 from £11.44 an hour to £12.21 an hour.
• National Minimum Wage for workers aged between 18 and 21 will also rise by a record-breaking 16.3% from the 1st April 2025. From £8.60 an hour to £10.00 an hour. 
• National Minimum Wage for apprentices will also rise by a record-breaking 17.9% from      the 1st April 2025. From £6.40 an hour to £7.55 an hour.

• Employer’s national insurance contribution will rise by 1.2% from 13.8% to 15%.
• The Secondary Threshold will be reduced from £9,100 to £5,000.
• Employment Allowance will increase by £5,000 to £10,500.

• Capital Gains tax will be increased, the lower rate will be raised from 10% to 18%, while the higher rate will rise from 20% to 24%. However there will be no increase on the 24% capital gains rate imposed on second properties.
• This is effective immediately - any property, investments or assets disposed on or after 30th October 2024 will be taxed at this rate.
• For the 2024 to 2025 tax year affected taxpayers will be required to identify gains made before and after 30 October 2024 to determine the correct rate of Capital Gains Tax when completing their tax return.

We have updated our capital gains tax calculator further below with the new 2025/2026 rates and will look at adjusting this for disposals made from 30th October 2024.

You can read the capital gains policy paper here.

• From April 2027 there will be reforms to Business & Agricultural assets after £1 million these assets will attract inheritance tax of 20%.
• UK Stocks listed on the AIM Market will have a 20% inheritance tax applied to them, along with a 50% relief.

In April 2024, the 75% discount to business rates is due to expire and will be replaced with a 40% discount. This will be capped at a maximum discount of £110,000.

The government announced its intention to introduce permanently lower business rates for retail, hospitality and leisure properties from 2026-27 to level the playing field for the high-street.

• The government will spend £5 billion on housing.
• The Department for Education will receive £6.7 billion a 19% real terms increase, Funds will be used to rebuild schools and support the hiring of teachers.
• The NHS will receive an increase of £25.7 billion.
• There will be a £2.9 billion increase in military spending and the government will continue their £3 billion commitment each year to Ukraine for the duration of the war.
• Government will compensate victims of the infected blood scandal with £11.8 billion, and there will be another £1.8 billion for victims of the Post Office Horizon IT Scandal.