The Autumn Budget 2024 introduced several changes likely to impact labour intensive businesses significantly. Arguing that the July election had given Labour a “mandate to restore stability and start a decade of renewal” Reeves described it as “a budget to fix the foundations and deliver change”.
Summary of Key Changes from the Autumn Budget 2024:
National Insurance (NI) Increase: Employer NI rates will rise by 1.2%, from 13.8% to 15%, starting 6 April 2025. The NI threshold for employers will drop from £9,100 to £5,000, also effective April 2025, remaining at this level until 2028. This change will increase Glen’s NIC bill by approximately £60,000 monthly and £720,000 annually.
National Living Wage: The rate will increase by 6.7%, from £11.44 to £12.21 per hour, starting in April 2025.
VAT & Business Rates for Private Schools: From 1 January 2025, VAT will be applied to education, training, and boarding services in private schools. Additionally, business rates relief for private schools will end in April 2025.
Given these changes, we are evaluating our service model to address the increased costs and compressed profit margins. We will work closely with you to understand your needs during this challenging time, marked by rising costs and inflation pressures.