A simple breakdown of the Autumn Budget
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Posted: Thu 7th Nov 2024
On 30 October, our attention was tuned firmly on London and the Autumn Budget that was being announced.
A lot went on. We've taken a few days to digest it all, mull it all over (washed down with a good few pumpkin spice lattes and loaf cakes, of course) and give you the rundown in human speak so that you don't have to tear your hair out doing all the deciphering yourself.
We've broken it down into sections so you don't need to bother with what's not relevant to you!
Things everyone needs to know
Inherited pensions will be subject to inheritance tax from April 2025, which may increase estate tax liabilities
The minimum wage is increasing from April 2025 as follows:
- 21 and over: £12.21 per hour (up from £11.44)
- 18-20-year-olds: £10.00 per hour (up from £8.60)
- Under 18s and apprentices: £7.55 per hour (up from £6.40)
Top tip: Don't forget to check if you are being paid enough!
Private school fees will now be subject to VAT
The non-dom tax regime is ending, meaning that long-term UK residents will no longer benefit from the current non-dom tax regime
Things limited company business owners need to know
Capital gains tax is increasing, which means that selling high-value assets will require more diligent tax planning
Double cab pickup vehicles (a.k.a cool trucks) will now be treated as 'cars' for personal tax purposes
The VAT threshold has remained at £90,000, but with additional costs, many businesses will need to increase pricing, so this could bring those currently under the threshold nearer to it or over. Ensure you keep a closer eye on your sales figures each month
Things employers need to know
The minimum wage is increasing from April 2025 as follows:
- 21 and over: £12.21 per hour (up from £11.44)
- 18-20-year-olds: £10.00 per hour (up from £8.60)
- Under 18s and apprentices: £7.55 per hour (up from £6.40)Employment allowance bump: The NIC employment allowance will double, rising from £5,000 to £10,500, offering more relief for small businesses
NIC threshold lowered: Employer NICs will apply on salaries above £5,000 (previously £9,100), increasing NIC expenses per employee
Percentage rate increase: The rate of employer NICs will rise to 15% from 13.8%
While the increased allowance offers some relief, the combination of a higher rate and lower threshold may mean an uptick in staffing costs.
We'd recommend doing a comparison to see how you're affected, but we're seeing on average those with a team of six or fewer full-time employees on minimum wage will be better off overall.
Double cab pickup vehicles (a.k.a cool trucks) will now be treated as 'cars' for personal tax purposes. You may need to now issue P11d’s for the taxable benefit
Taxable benefits (e.g. company cars, private medial, etc.) will be required to be reported and paid monthly using payroll software to report from April 2026
Things property owners need to know
Rates for residential property gains remain the same at 18% (basic) and 24% (higher). Stability here means a bit of a breather for property investors
Relief caps: Business property relief and agricultural property relief will see changes from April 2026. Up to £1 million in assets will still receive 100% relief, but anything beyond that will now only qualify for 50% relief
Final thoughts: What should you do?
The Autumn Budget updates bring both new opportunities and challenges for small businesses, affecting everything from staffing costs to tax planning and financial strategy.
To prepare, think about:
Reviewing your budget for wage increases and NIC changes
Reassessing any planned asset sales or transfers to optimise the capital gains tax and inheritance tax changes
Exploring how VAT, employee benefits and vehicle changes could impact your business’s cash flow and operational choices
Now, we are well aware that this most likely has raised a lot more questions in your mind, even if it has answered some!
Please remember that we are always happy to chat. Connect with Cheryl Sharp!
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