The key takeaways from the Autumn Budget 2024

The key takeaways from the Autumn Budget 2024

The Autumn Budget 2024 is here and has already made waves for business owners, with new tax increases balanced by targeted support. Here’s a breakdown of what small and medium-sized business (SME) owners need to know – without the jargon.

1. National Insurance Changes – Prepare for Higher Costs

Employers will see a hike in National Insurance Contributions (NIC), which are set to rise by 1.2% to a total of 15% in April 2025. The threshold for paying NIC is also being lowered, meaning employers start paying sooner – when an employee earns just £5,000 annually. Although this isn’t thrilling news, especially for small businesses trying to keep staffing affordable, the government is expanding the Employment Allowance to £10,500, which should soften the blow a little for eligible employers. If you’ve been relying on part-time or seasonal staff, you might need to adjust budgets to balance the increased costs.

2. Minimum Wage Hike – Great for Staff, but What About Your Margins?

Get ready to see paychecks grow, as the National Living Wage will jump from £11.44 to £12.21 per hour come April 2025. Employees will feel the benefit, and it could even improve staff retention – but it’s also likely to squeeze your budget, especially if you’re in industries like hospitality or retail where many employees are paid hourly. Of course, fair pay matters, and many businesses will welcome the chance to reward their teams, but it’s worth planning now to manage the increased wage costs.

3. Crypto Reporting – Heads Up for the Digitally Savvy

Crypto-keen businesses, heads up: from January 2026, UK crypto providers must start reporting user transactions to tax authorities. If you’re dabbling in digital assets or accepting crypto payments, this may sound daunting. But it’s all about improving transparency and aligning with international standards, so this could help create a level playing field in the long run. Plus, if you’re prepared, you’ll avoid a reporting headache later.

4. Stability in Corporate Tax

Here’s a silver lining – corporation tax is holding steady at 25%. After a series of changes over the past few years, a stable corporate tax rate is a relief for many businesses looking to plan long-term. You won’t need to reconfigure your tax strategy for the upcoming year, so you can focus instead on the more pressing updates on NIC and wages.

5. Tax Compliance for Labour Providers

The government is cracking down on tax dodging within labour supply chains by placing tax reporting responsibility on umbrella companies. If you work with temporary or contract labour, expect tighter PAYE regulations aimed at ensuring fairness across the board. While it may mean an added layer of compliance, it’s designed to ensure everyone’s playing by the same rules and could simplify oversight in the labour market.

The Autumn Budget 2024 brings a few key shifts that business owners should prepare for now to stay on top of financial planning and manage rising operational costs.

Understanding which tax reliefs and allowances are available, like the expanded Employment Allowance, can also help offset some of the impact of these changes. If you're unsure where to start or need help reviewing how these updates affect your business, get tailored advice from an expert at Perk Accountants. Reach out for a no-obligation chat at gary.summons@perkaccounting.co.uk to explore your options and create a proactive plan.