The Autumn Budget, delivered last week, introduced a new National Minimum Wage and National Living Wage, alongside a series of tax increases that will significantly impact small business owners. With these changes taking effect from April 2025, how will the Autumn Budget 2024 impact your business?
Increased costs
Rising wage and Employer National Insurance contributions (NICs) will hit small businesses hard. Those in the hospitality and retail sectors will be particularly affected by the tax hikes, which will increase operational costs and squeeze profit margins.
- National Living Wage for over 21’s to rise from £11.44/hour to £12.21/hour
- National Minimum Wage for 18–20-year-olds to rise from £8.60/hour to £10/hour
- Apprentices hourly rate to increase from £6.40/hour to £7.55/hour
- Employer Contributions (NICs) to increase by 1.2% from 13.8% to 15%
- Secondary threshold for employers to pay NI reduced from £9,100 to £5,000
- Employment allowance to increase from £5,000 to £10,500
Changes to recruitment and retention
The cost of hiring new workers will increase so staff retention will be key. To retain top talent, it’s important to focus on your employee benefits and performance management strategy in areas like e-learning and professional development opportunities
Payroll will change significantly
By April 2025, you’ll need to make sure your payroll accurately reflects pay and tax changes, including increased minimum wage rates, employer NICs, and changes to statutory sick pay (SSP).
As a business owner, you can prepare now by (1) familiarising yourself with what’s changing, (2) making sure your payroll processes are accurate and compliant, and (3) seeking expert advice to avoid getting new rates wrong and facing legal penalties.
For further help and advice, please contact our HR Team on 01981 590514.
