October 2024 Budget
In her first budget today, the Chancellor of the Exchequer, Rachel Reeves, announced a range of changes which will likely affect many households and businesses in the coming months. Below are some of the key announcements made.
Umbrella Company liabilities
There is mention of “reform” within the Umbrella company sector, in particular shifting the responsibility/liability for non-compliance up the supply chain to the recruitment business and/or end-hirer. While we will need to await further detail, we welcome this move as an FCSA accredited, SafeRec certified business.
National Insurance Contributions
The Chancellor announced that employers’ National Insurance contributions will soon rise from 13.8% to 15% from April 2025.
Businesses will also have the threshold at which they will need to start paying National Insurance on a worker’s earnings lowered from £9,100 to £5,000.
However, Ms Reeves confirmed that there will be no National Insurance, VAT or income tax increases for working people at this time, however the current freeze on Income Tax and National Insurance thresholds will not be extended beyond 2028.
Business Taxes
Another key point in the budget was the announcement that the employment allowance (which allows companies to reduce their National Insurance liability) will increase greatly from £5,000 to £10,500.
National Minimum Wage Increase
As part of her statement, Ms Reeves confirmed that from April 2025, the National Living Wage for those over 21 would rise to £12.21 an hour, a 6.7% increase whilst the National Minimum Wage would rise by 16% for 18 to 20 years olds to £10 per hour.
Those aged 16 to 17 will see a pay increase from £6.40 to £7.55 per hour.
Pensions
The budget also included confirmation that Pensions will be uprated by 4.1% from April 2025, ensuring that the pension triple lock will remain intact.
Transport
The Chancellor stated that she would freeze fuel duty next year, maintaining the existing 5p cut for a further year and that there would not be higher taxes at the petrol pumps next year.
For those who travel using public transport in England, there will be an increase to the single bus fare cap which will rise from £2 to £3 which will come into place from January 2025.