Autumn Budget 2024: What the announcements mean for your business

On 30 October, Chancellor Rachel Reeves delivered her first budget under the Labour government. We’ve summarised some of the information that’s likely to be important to small business owners and sole traders.

However, there’s a lot of information within the Chancellor's address to Parliament, and the following list is not exhaustive of all the announcements made. 

You can read the full UK Autumn budget on the GOV website.

1.2% increase to National Insurance contributions

From April 2025, there will be an increase to the amount of National Insurance (NI) contributions an employer must make. NI Contributions will increase by 1.2% to a total of 15%, and the National Insurance primary threshold - which is when employers begin to pay NI, will be lowered from £9,100 to £5,000.

Although the NI threshold has been lowered, the amount of National Insurance a business can offset will increase as the employment allowance will change from £5,000 to £10,500. The government claims this change to the employment allowance will result in 865,000 employers paying no National Insurance, whilst over 1 million businesses will pay the same amount of National Insurance as the previous year. 

The change to the employment allowance means a business can hire up to 4 full time workers on the National Living Wage before having to pay National Insurance. 

Please note, changes to National Insurance will automatically be applied in QuickBooks Payroll, ready for the new tax year.

Freeze on the Income Personal tax threshold will end in April 2028

The Chancellor confirmed that the freeze on income tax and National Insurance thresholds will end in April 2028. From 2028 - 29, personal tax thresholds will be updated in line with inflation.

Changes to the minimum wage

The National Living Wage for workers over 21 will increase by 6.7% in April 2025 to £12.21 per hour, which is worth an extra £1,100 per year for a full-time worker.

Meanwhile the National Minimum Wage for 18 to 20-year-olds will go up by 16% to £10 per hour.

Update on business rates

The current 75% discount on business rates is set to expire in April 2025, this will be replaced by a discount of 40% (maximum discount of £110k). In addition, there is a plan to introduce permanently lower business rates for high-street retail, hospitality and leisure properties from 2026-27.

Corporation tax

The main rate of Corporation tax for businesses with taxable profits over £250,000 will remain at 25% until next election.

Capital Gains Tax

Capital Gains tax rates for disposal on or after 30 October 2024 will increase from 10% to 18% and the higher rate from 20% to 24%. The rate for Business Asset Disposal Relief and Investors’ Relief will increase to 14% from 6 April 2025, and will increase again to match the lower main rate at 18% from 6 April 2026.

Windfall tax on energy 

The energy profits levy applied to oil and gas firms will rise by 3%, meaning the level of tax is now 38%, and this will remain in place until 31 March 2030.

HMRC changes 

The interest rate applied will increase on tax that is overdue to encourage prompt payment, in addition there will be an increase in HMRC criminal investigation work by hiring more compliance officers.

Making Tax Digital update

There was a Making Tax Digital (MTD) update within the budget, and the Labour government reiterated its commitment to delivering on the current timeline and expanding the rollout for businesses with an income over £20,000 per year. Rest assured, we’ll be supporting all customers with MTD, and our Product Director Nick Williams shared “We have been, and continue to, work closely with HMRC on the testing phase, including working jointly on the APIs. This enables us to support our customers in preparation of the changes. Intuit QuickBooks was the first large provider recognised by HMRC for the MTD for Income Tax test phase.”

Learn more about how MTD will affect Income Tax requirements with this guide.

Webinar: Autumn Budget Review with Rebecca Benneyworth

Join Rebecca Benneyworth as she reviews the new Labour government’s first budget announcement. Hear about how the Autumn budget will impact you and pose your questions on how the budget will impact your clients.

Date: Wednesday 6 November 2024 

Time: 2:00 PM - 2:45 PM

Register now

The information on this website is provided free of charge and is intended to be helpful to a wide range of businesses. Because of its general nature the information cannot be taken as comprehensive and they do not constitute and should never be used as a substitute for legal, accounting, tax or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business. Despite our best efforts it is possible that some information may be out of date. Any reliance you place on information found on this site or linked to on other websites will be at your own risk.