It’s not all doom and gloom as the 2024 Autumn Budget, delivered by Chancellor Rachel Reeves, brings significant policy shifts aimed at economic stability, investment, and business sector growth. Below, we break down the key announcements and their implications for businesses of different sizes and industries across the UK. Increase in National Insurance Contributions (NIC) […]
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It’s not all doom and gloom as the 2024 Autumn Budget, delivered by Chancellor Rachel Reeves, brings significant policy shifts aimed at economic stability, investment, and business sector growth.
Below, we break down the key announcements and their implications for businesses of different sizes and industries across the UK.
One of the most significant impacts for businesses is the increase in employer National Insurance contributions from 13.8% to 15%. Additionally, the threshold for contributions has been lowered from £9,100 to £5,000. This change will generate approximately £25 billion in revenue for the government but poses an increased financial burden for employers.
Implications:
The budget introduces an increase in Capital Gains Tax rates, with the lower rate rising from 10% to 18% and the higher rate from 20% to 24%. Additionally, carried interest will be taxed at a single unified rate of 32% starting April 2025.
Implications:
The National Living Wage will rise to £12.21 per hour starting in April 2025. This follows a 6.7% increase from the upcoming rate of £11.44 in April 2024. The wage hike will substantially affect labor-intensive industries.
Implications:
The government extended the inheritance tax threshold freeze until 2030. The first £325,000 of any estate remains tax-free, increasing to £500,000 for estates including a residence passed to direct descendants. From April 2026, business and agricultural assets above £1 million will face an effective 20% tax rate with 50% relief.
Implications:
To support smaller businesses, the Employment Allowance will be increased from £5,000 to £10,500. This change means 865,000 employers will be exempt from paying any National Insurance next year, providing significant relief to smaller companies.
Implications:
Reeves’ budget commits to making Britain a “clean energy superpower,” with investments in carbon capture and green hydrogen projects. The establishment of GB Energy in Aberdeen further supports sustainable development.
Implications:
Significant funding will be directed toward infrastructure, including the £500 million increase for road maintenance, expected to fix one million potholes annually, and the delivery of the Trans-Pennine upgrade and East-West Rail projects. The government will also restore HS2 connections between Old Oak Common and Euston.
Implications:
The UK government announced steps to transform the existing Apprenticeship Levy into a more adaptable Growth and Skills Levy, with a planned investment of £40 million. This initiative aims to support the development of new foundational and shorter apprenticeships in key sectors.
The revised levy will be designed in collaboration with employers, training providers, and learners to ensure that training funded by the levy meets workforce needs and offers value for money. Skills England will oversee a comprehensive consultation process to gather input from various stakeholders and align the program with industry demands.
Implications:
The 2024 Autumn Budget presents a blend of opportunities and challenges for businesses across the UK. While increased taxes and wage costs present financial pressure, investment in infrastructure, green energy, and workforce development provide pathways for growth and innovation. Companies of all sizes will need to adapt their strategies to leverage support measures and mitigate cost increases effectively.
At CH4B, we’re here to help your business navigate these changes with strategic guidance and expert advice. Schedule a call with us today to create a resilient plan tailored to your business needs, ensuring you make the most of these budget changes.
Stay tuned for our in-depth guide on how to adapt to these budget changes, coming soon. Sign up for our newsletter to receive it straight to your inbox and stay informed on the latest business insights.
