We have a new government, a new Chancellor, and now, a new 2024 Autumn Budget outlining what the government’s main tools to deliver change will look like. So, what is the verdict? Keep reading to find out!
New Tax Changes and National Insurance Updates for Employers
The Chancellor announced a wide range of tax measures aimed at raising an additional £40bn in revenue. One of the most notable changes is to Employers’ National Insurance Contribution (NIC), which will increase from 13.8% to 15% from April 2025, while the threshold at which employer NICs become payable will fall from £9,100 to £5,000.
To help mitigate these additional NI costs for smaller employers, the Employment Allowance will double from £5,000 to £10,000 and is expected to relieve nearly 865,000 small businesses of National Insurance costs next year.
Now, while any increase in National Insurance can be tough, this is a good opportunity for employers to look at how they structure their payroll. For example, by adjusting salaries or benefits, they may be able to lower tax costs without reducing their employees’ take-home pay.
Minimum Wage Increases and Bridging the Wage Gap
The Government has accepted the Low Pay Commission’s recommendations, meaning there will be a 6.7% increase in the National Living Wage for those aged 21 and over to £12.21 per hour, equating to an additional £1,400 annually for full-time workers.
18–20-year-olds will also see a substantial 16.3% rise to £10 per hour. This increase helps the move closer to a single minimum wage for everyone, bridging the gap across different age groups. These changes in pay rates will take effect from 1 April 2025.
Good News for Retail, Hospitality and Leisure (RHL)
Starting in 2026–27, the government will deliver a fairer business rates system through permanently lower business rate multipliers for retail, hospitality and leisure (RHL) properties. The 2024 Autumn Budget also includes £1.9 billion of support to small businesses and the high street in 2025–26 by freezing the small business multiplier and providing 40% relief on bills for RHL properties, with a maximum discount of £110,000.
Cost-Saving Strategies for Employers
If you’re an employer looking to hire but feeling concerned about any of the changes mentioned in the recent Budget, there are strategies you can employ to manage your costs more effectively.
For example, adopting a flexible or work-from-home policy can help you save on:
- Rent and utilities
- Relocation costs
- Cleaning services
- Security costs
- Food costs
- Office equipment costs
- Tax costs
Not only can this approach help save your business money, but recent research has also shown a huge 90% of employees who were offered flexible working felt flexibility was the most important driver of wellbeing — rated above wellness perks such as gym memberships and wellbeing apps.
Another option to consider is hiring temporary staff. This approach can provide your business with a cost-effective and flexible workforce solution when you are short on manpower but unable to hire permanently due to budget or headcount restraints. In any situation where your workforce is stretched too thin and you need expert help, hiring an experienced member of staff on a temporary basis can be an excellent solution.
