Written by Jessica Edroff & Daniel Cotter
Client Service Managers
Ward Goodman
December 5, 2024
The Chancellor’s Autumn Budget 2024 introduced significant changes aimed at funding public services, boosting economic growth, and supporting small businesses. For business owners, these updates bring both opportunities and challenges. Here’s a breakdown of the key measures affecting UK businesses.
1. Employers’ National Insurance Contributions (NICs)
From April 2025, the rate of employers’ NICs will increase by 1.2 percentage points, rising from 13.8% to 15%. Additionally, the secondary threshold—the point at which employers start paying NICs—will be reduced from £9,100 to £5,000 per year.
To support businesses, the Employment Allowance (the amount employers can claim back on NICs) will increase from £5,000 to £10,500, and businesses with Class 1 National Insurance bills exceeding £100,000 will now qualify for this allowance.
2. Corporation Tax and Business Asset Disposal Relief
The headline Corporation Tax rate remains unchanged at 25% on profits over £250,000. However, changes to Business Asset Disposal Relief could impact business owners planning to sell their business:
- The tax rate on proceeds will increase from 10% to 14% in April 2025, and further to 18% by 2026-2027.
3. Business Rates for Retail, Hospitality, and Leisure
To support high-street businesses, the government announced:
- A 40% rates relief for retail, hospitality, and leisure properties, capped at £110,000.
- A freeze on the small business multiplier until 2026.
Additionally, from 2026-2027, two permanently lower business rates will be introduced for these sectors, funded by a higher multiplier for the most valuable properties.
4. Small Business Loans and Investment Support
The British Business Bank will receive £250m in funding to expand its small business loan programmes, improving access to finance for small enterprises. Furthermore, the Annual Investment Allowance remains set at £1m, supporting businesses investing in equipment and infrastructure.
5. Inheritance Tax (IHT) and Business Property Relief
From 6 April 2026, significant changes to IHT reliefs for businesses will come into effect:
- The first £1m of combined agricultural and business property will qualify for 100% relief. Any amounts above this threshold will receive 50% relief.
- For AIM-listed shares, the current 100% IHT relief will reduce to 50% from the same date.
These changes mean business owners may need to reassess their succession and estate planning strategies.
6. Minimum Wage Increases
From April 2025, the National Living Wage for workers over 21 will rise by 6.7%, increasing from £11.44 to £12.21 per hour. For businesses employing younger workers, the minimum wage for those aged 18 to 20 will rise from £8.60 to £10 per hour, representing a 16.2% increase. Apprentices minimum wage will also rise from £6.40 to £7.55 per hour, representing an 18% increase.
7. Taxation and Reporting for Employee Benefits
From 2026, employers will be required to implement mandatory payrolling of benefits, excluding loans and accommodation. This change simplifies tax reporting but requires adjustments to payroll systems.
How to Prepare Your Business
The Autumn Budget presents both hurdles and opportunities for UK businesses. To navigate these changes effectively:
- Review Payroll Systems: Update processes to account for changes in NICs and mandatory payrolling of benefits.
- Evaluate Tax Efficiency: With IHT and CGT changes on the horizon, revisit your business’s tax and succession planning strategies. Find out more about our Capital Gains Tax and IHT Services
- Utilise Support Measures: Take advantage of the increased Employment Allowance, business rates relief, and small business loan programmes.
How Ward Goodman Can Help Your Business
At Ward Goodman, we specialise in helping businesses understand and adapt to changing regulations. Our team offers a bespoke financial support solution to business owners to ensure they are operating efficiently under the new regulations introduced in the Autumn Budget.
If you’d like to discuss how these changes may impact your business, contact us or call us at 01202 875 900.
