2024 Autumn statement round-up for busy business owners

The first Labour Budget for 14 years has seen the new government outline its spending plans. 

Before the announcement, Chancellor, Rachel Reeves, stated that she plans to reboot the UK economy by focusing on three priorities: Fixing the foundations of the economy, investing in the future, and rebuilding Britain. 

But the government also warned there would be “painful” decisions because of a 'dire economic inheritance' left by the Conservatives. 

But what exactly does all that mean? And was the budget good for small business owners? We'll report the facts and let you come to your own conclusions.

2024 Budget breakdown for business owners 

Here’s all you need to know about how the Autumn Statement will affect your business. 

National Insurance Contributions  

As expected, there’ll be no change to employee National Insurance Contributions (NICs), but employers will see their NICs increase by 1.2 percentage points. This means that from April 2025, employer contributions will go up from 13.8% to 15.0%.

The Chancellor also announced a cut to secondary threshold (the point at which employers start paying NICs on employee's earnings) has been cut from £9,100 to £5,000.

To try and lessen the impact on smaller businesses, the Employment Allowance will increase from £5,000 to £10,500. This will mean an estimated 865,000 employers will pay no NICs next year. It’s also estimated that a further 1 million employers will pay the same as or less than previously.

Wages 

The national living wage - the minimum amount that can be paid to workers who are 21 and over - will rise by 6.7% from April 2025, when the following will apply:

• £12.21 per hour (up from £11.44 per hour) for employees aged 21 and over 
• £10.00 per hour (up from £8.60 per hour) for employees aged 18-20  
• £7.55 per hour (up from £6.40 per hour) for employees aged under 18  
• £7.55 per hour (up from £6.40 per hour) for apprentices 

Business rates 

Business rates are a tax on property used for business purposes, such as offices, shops, pubs, and warehouses. You can check out the government website for more information on business rates.  

Business rates are calculated by using a multiplier. The rateable value of your business property is multiplied by this number to give you your final bill. If the rateable value of your property is below £51,000, your bill will be calculated using the small business multiplier. This mutliplier has been frozen.

The Retail, Hospitality and Leisure business rates relief scheme, which offers a 75% relief on business rates, will end in April 2025. It will be replaced by a discount of 40%, up to a discount of £110,000.

The current 75% discount to business rates - due to expire in April 2025 - will be replaced by a discount of 40% - up to a maximum discount of £110k.

Go to the government's website to work your business rates.

Corporation tax 

No change to corporation tax was announced.

If your company has profits of £50,000 or less, you’ll pay a small profits rate (SPR) of 19%. Any profits between £50,000 and £250,000 will be charged at a higher rate of 25%. Marginal relief is offered to make this an incremental increase to soften the impact. 

Full capital expensing for businesses will stay in place. This means that every £1 a company invests in IT, plant or machinery can be deducted in full from taxable profits.

Income tax

There will be no extension of the freeze in income tax thresholds beyond the decisions of the previous government. This means the current rates (below) will be frozen until 2028.

From 2028/29, personal tax thresholds will be uprated with inflation.

Capital Gains Tax

If you sell assets at a profit, such as a second home or investments, including shares, you’ll be charged capital gains tax on the money you make.

The lower rate of Capital Gains Tax will rise from 10% to 18%, and the higher rate from 20% to 24%.

The rates on residential property will remain at 18% and 24%.

Asset Disposal Relief will stay at 10% on all qualifying assets until April 2025, when it will increase to 14%. From April 2026 it will increase to 18%. The lifetime limit asset disposal will stay at £1 million.

Stamp Duty

One change the Chancellor felt couldn't wait was an increase in Stamp Duty Land Tax (SDLT). A rise of 2% to 5% was put in place from October 31 (the day after the Budget) for those purchasing a second home and buy-to-lets. This tax rise will not affect first-time buyers, instead, landlords will take the hit.  

This rise could have a knock-on effect to renters as landlords recoup costs with hikes to monthly rent. For Companies purchasing residential properties worth more than £500,000, the rate increases from 15% to 17%. 

The increased thresholds are as below. You can find out more at the government website. 

Cigarettes and alcohol

Alcohol duty rates on draught products will be cut by 1.7%. This will amount to a penny off the price of a pint. Alcohol duty rates on non-draught products will increase in line with RPI from February next year. Check out the government's website for a full rundown of the current alcohol duty rates.

The tobacco duty escalator (which increases the duty rate on tobacco products by a percentage above the Retail Price Index (RPI) inflation rate) will be renewed at the Retail Price Index (RPI) +2%. 

Duty on hand-rolling tobacco will go up by 10%. A flat-rate duty on all vaping liquid will be introduced from 2026, and a one-off increase in tobacco duty to maintain the incentive for smokers to give up smoking.

How to cut your business costs

No matter what you make of the Autumn Statement, it's always worth working out how you can cut your business costs. Switching business essentials with Bionic is a good place to start.

We compare business gas, business electricity, business insurance, business VoIP, and business phone and broadband to help you find the best deals from our panel of suppliers. We also compare business finance with Think Business Loans.