The October Budget 2024 – how will it affect small businesses?

The Budget 2024 – how will it affect small businesses?

• The budget will raise taxes by £40bn.
• National insurance (NI) contributions for employers (not employees) will increase by 1.2 percentage points to 15% from April 2025.
• The point at which employers start paying NI will fall from £9,100 a year to £5,000 a year. This will raise £25bn per year.
• Tax thresholds will rise in the future, meaning the point at which people pay higher taxes will be increased. These tax bands had been frozen. But this freeze will end in 2028 and the bands will then increase at the rate of inflation.
• Health and employment services for people who are disabled and long-term sick will get £240m in funding.
• The minimum wage will rise by 6.7% to £12.21 an hour for people aged 21 and over. This is the equivalent of £1,400 a year for a full-time worker. Workers aged 18 to 20 will see their minimum wage increase by 16.3% to £10 an hour.
• People will now still be able to claim carers allowance while earning more than £10,000 a year (the equivalent of 16 hours work a week). This will mean an extra £81.90 a week for those newly eligible.

So we recommend that you….

1. Understand the impact of these changes for your business
2. Review all of your business costs and reduce any unnecessary spend.  Try to be as lean as possible.
3. Take a look at what you charge for your products and services, are you charging at the right price? If you haven’t raised your prices for some time, then consider whether this is worth revisiting.
4. Plan for 2025.  Minimum wage increases and Employers NI goes up in April 2025, do the maths now and work out what you are able to afford.

If you have any questions regarding the budget and how to implement changes, contact us on:

Telephone – 023 9298 2685 or Email: sam@foreshorehr.com