The Autumn Budget 2024, presented by Chancellor Rachel Reeves, is a comprehensive financial plan that introduces changes to tackle the UK’s current economic challenges. With rising living costs and mounting economic pressures, this budget addresses individual and business needs. Whether you’re an individual trying to manage household expenses or a business seeking sustainable growth, understanding how these changes will impact your finances and operations is essential.

Here’s a breakdown of the Autumn Budget 2024 key announcements, how they might affect individuals and businesses and what steps you can take to prepare.

For Individuals: Key Points of the Autumn Budget 2024

Increase in National Living Wage

• What Was Announced: The National Living Wage will rise from £11.44 to £12.21 per hour starting April 2025 as part of the Autumn Budget 2024 (source).
• Impact on You: This increase means an extra £1,600 annually for full-time workers on minimum wage, providing a significant boost to cover essential costs like groceries and utilities, and offering a ray of hope in the face of rising living costs.
• Example: Sarah, a full-time retail worker, will see a £130 monthly increase due to this change in the Autumn Budget 2024.
• Budget Tip: It’s crucial to set aside a portion of this income increase for emergencies, creating a buffer for unexpected costs and ensuring a sense of security in times of uncertainty.

How National Insurance Changes Will Affect You in 2024

• What Was Announced: The Autumn Budget 2024 includes an increase in employers’ NICs by 1.2 percentage points to 15%, and the threshold for NICs will be lowered to £5,000 from £9,100 (source).
• Impact on You: These changes may increase employment costs, potentially limiting wage increases or hiring, particularly in smaller companies.
• Budget Tip: If wage increases are paused, consider building a “job security fund” equal to three months’ expenses to help manage income fluctuation.

Capital Gains Tax Changes in the Autumn Budget 2024

• What Was Announced: The Autumn Budget 2024 increases Capital Gains Tax rates from 10% and 20% to 18% and 24% (source).
• Impact on You: This impacts those selling assets like property or investments, increasing tax liabilities on gains.
• Budget Tip: Consider spreading asset sales over multiple years to minimise the tax burden, especially considering the changes in the Autumn Budget 2024.

For Businesses: Key Points of the Autumn Budget 2024

Increased National Living Wage for Employees

• What Was Announced: In the Autumn Budget 2024, the minimum wage for workers aged 23 and over will rise to £12.21 an hour starting in April 2025 (source).
• Impact on Businesses: Employers will face higher wage bills, particularly in sectors with a large minimum wage workforce, such as hospitality and retail. For smaller businesses, this could lead to tighter margins or cost adjustments. For instance, a small café employing 10 minimum-wage workers for 40 hours a week could see their monthly wage costs increase by approximately £ 5,200 due to the Autumn Budget 2024 changes.
• Example: The Autumn Budget 2024 changes will increase the monthly wage costs of a café employing 10 minimum-wage workers for 40 hours a week by approximately £5,200.
• Business Strategy: Consider conducting an internal review of pricing or operational efficiencies to offset higher wage expenses. Adjustments to pricing or sourcing may help balance the added costs.

National Insurance Contribution Increase

• What Was Announced: Employers’ National Insurance Contributions will rise by 1.2 percentage points to 15%, and the NICs threshold will be reduced from £9,100 to £5,000 (source).
• Impact on Businesses: This will increase payroll costs for employers, which may particularly affect smaller businesses operating on thin margins.
• Example: The Autumn Budget 2024 might increase the annual NICs costs of a small business with 15 employees by around £3,000.
• Business Strategy: It’s essential for businesses to prepare for this by reviewing budgets, adjusting spending plans, and exploring potential cost-saving initiatives within operations. This proactive approach will help businesses stay in control of their finances in the face of the Autumn Budget 2024 changes.

Corporate Tax Benefits for Green Initiatives

• What Was Announced: The Autumn Budget 2024 introduces tax incentives for businesses investing in energy-efficient technologies or renewable energy sources (source).
• Impact on Businesses: Companies investing in energy-saving measures can benefit from reduced tax liabilities, which can help lower operational costs in the long run.
• Example: A manufacturing business investing in solar panels can reduce energy costs while taking advantage of these tax incentives, ultimately lowering its annual operating expenses.
• Business Strategy: Explore energy-efficient upgrades or renewable energy sources for potential savings and tax benefits under the Autumn Budget 2024. This may help improve long-term operational efficiency and lower environmental impact.

Capital Gains Tax for Business Asset Sales

• What Was Announced: The Autumn Budget 2024 includes increased capital gains tax rates for business assets, which affects owners selling property, shares, or other assets (source). Impact on Businesses: Businesses or shareholders selling assets will see higher tax liabilities, which could influence selling strategies and decisions on holding versus selling.
• Example: If a business owner sells an asset worth £100,000, the Autumn Budget 2024’s increase in Capital Gains tax will result in an extra £4,000 in taxes.
• Business Strategy: Work with a financial advisor to plan the timing of asset sales and consider phased selling strategies to minimise tax impacts.

Additional Public Spending and Borrowing

• What Was Announced: The Autumn Budget 2024 outlines a £70 billion increase in public spending and £28 billion in borrowing to improve infrastructure, education, and healthcare (source).
• Impact on Businesses: Increased public investment may indirectly benefit businesses by improving infrastructure that supports operational efficiency. However, additional government borrowing could raise interest rates, affecting business loans.
• Example: A logistics company could see improved transport infrastructure but may face higher borrowing costs if interest rates rise.
• Business Strategy: Consider refinancing existing loans to secure lower interest rates, protecting your business from potential increases due to the Autumn Budget 2024 borrowing changes.

The Autumn Budget 2024 introduces impactful changes for individuals and businesses across the UK. Each measure presents unique challenges and opportunities, from wage increases and energy initiatives to tax adjustments. By understanding these changes, individuals and businesses can make strategic decisions to improve financial stability, navigate rising costs, and adapt to the evolving economic landscape.

Consider subscribing to our newsletter for regular updates, budgeting tips, and business strategies tailored to the Autumn Budget 2024 changes. Stay informed and prepared to take advantage of these developments in the coming year.