Autumn Budget 2024

On 30 October 2024, Chancellor of the Exchequer, Rachel Reeves, presented her first Autumn Budget – the document titled “Fixing the foundations to deliver change”. Rachel Reeves was appointed on 5 July 2024 as the first woman to serve in this role. She pledges a “Get Britain Working” package as part of a work and welfare overhaul “so people who can work, do work”.

Minimum Wage hourly rates from April 2025

Tax rates

There will be no increase to the basic, higher or additional rates of Income Tax, National Insurance (“NI”), or VAT for working people.

From 2028/29 personal tax thresholds (frozen by the previous Government) will be updated in line with inflation.

Class 1 Employer’s NI will be increase by 1.2% from 13.8% to 15%. The secondary threshold (the point at which employers become liable to pay NICs on employees’ earnings) will be lowered from £9,100 to £5,000. Both measures will take effect from 6 April 2025.

Employment Allowance (“EA”)

The EA will be increased from £5,000 to £10,500 from April 2025.

Government will also expand the EA by removing the £100,000 eligibility threshold so all eligible employers will now benefit (subject to other eligibility criteria).

Government recruitment / updates

HMRC will hire 5,000 extra compliance officers, update their IT systems and app to improve user experience. The first 200 will start training in November.

There will be a COVID Corruption Commissioner appointed who will lead work to recover public funds from companies that took unfair advantage of Government schemes during the COVID-19 pandemic.

Fron 6 April 2025, late payment interest on unpaid tax liabilities charged by HMRC will be increased by 1.5%.

Tax avoidance

There will be increased collaboration between HMRC, Companies House and the Insolvency Service to tackle “phoenixism”.

There will be a consultation in early 2025 on a package of measures to tackle promoters of marketed tax avoidance.

Another consultation focuses on reforming HMRC’s correction powers to tackle non-compliance, including exploring changes to HMRC’s existing powers and processes and a potential new power to require taxpayers to correct mistakes themselves.

Umbrella market

Government will make recruitment agencies responsible for accounting for PAYE on payments made to workers that are supplied via umbrella companies. Where there isn’t an agency in the supply chain, the responsibility will fall to the end client business. This will take effect from April 2026. Government has published a policy paper here.

Aspire Comment

There is no good news in this budget for umbrella companies with the double whammy of the increase in Employer’s NIC and the aim to move responsibility for the correct operation of PAYE to the agency or, where there is no agency, the end hirer.   

We are reviewing the policy paper and will provide a further update