Autumn Budget 2024: Breakdown for Business Owners
With a new government, expecting a shake-up in the country’s finances is only natural. This means changes scheduled to how taxes work and potentially significant changes to your business.
This blog will review the Autumn budget 2024, its tax implications, and how they may affect you.
Capital Gains
The changes to capital gains were immediate. With rises to the basic and higher tax rates to rise from 10% and 20% to 18% and 24%, respectively. This brings the rate in line with the disposal of residential properties, which are currently unaffected.
The business asset disposal relief or investors relief that used to be entrepreneurs’ relief, has been increased from 10% to 14%.
So, while most types of capital gains will be paying more, those selling residential properties need not worry at the moment.
Employer National Insurance Contributions (NIC)
While, as promised, individuals do not have to pay more tax or NIC, employers have been hit with an increase from 13.8% up to 15%. With the addition of reducing the annual threshold for paying employer NIC from £9,100 to £4,992.
This actually takes the rate lower than the lower earnings limit, which is the minimum amount required to be paid for your wages to count towards your state pension and other benefits.
This is counteracted by an increase in the Employer’s Allowance from £5,000 to £10,500. This means that employers with at least one employee or two directors who would normally pay Employer NI do not pay the first £10,500 in the year.
There is also no upper limit to be eligible.
This effect is that “one man band” company directors/owners will now have to pay the increased employer NIC on their wages if they want to cover their National Insurance record each year.
Small companies with employees other than the main director can actually see a reduction in NIC to pay.
These changes are expected to take effect from the 6th of April 2025.
Minimum Wage
The minimum wage is set to increase, with the new hourly rates being £7.55 for apprentices and under 18s. £10.00 for those between 18 and 20 and £12.21 for those 21 or over.
If you’re a limited company, sole trader or self-employed and would like to discuss how these changes could affect your business, please do not hesitate to contact us and book a consultation.
Adam is our managing director and a fully AAT-certified accountant. Adam founded Short Accounting in 2014 with the aim of helping business owners with their accounting and tax needs so that they can focus on growing and managing their businesses.
Over the years Adam has helped thousands of SMEs, sole traders, limited companies and more with the full range of accounting services. He’s a firm proponent of adopting the latest in accounting tech to help streamline processes to ensure that all of our clients get the best service possible.
