2024 Autumn Budget Highlights: Key Changes and Implications for UK Businesses

Ahead of Grafene Accounting’s full budget summary, we’ve outlined the key points from today’s statement by the Chancellor.

Chancellor of the Exchequer Rachel Reeves delivered the UK’s 2024 Autumn Budget, presenting a series of fiscal reforms aimed at supporting the National Health Service (NHS), enhancing wages for low-income workers, and increasing employer tax contributions. Reeves underscored that the Budget embodies Labour’s commitment to easing cost-of-living pressures, strengthening public health, and reducing the national deficit, all while safeguarding vital social services. Here’s an overview of the main announcements and what they mean for individuals and businesses.

1. Increase in National Insurance Contributions (NIC) for Employers

The 2024 Budget introduces a substantial increase in National Insurance Contributions (NICs) for employers, anticipated to generate approximately £25 billion each year. From April 2025, the employer NIC rate will rise by 1.2 percentage points to 15%. Additionally, the threshold at which this becomes payable will lower from £9,100 to £5,000.

This shift places a significant financial burden on larger employers but leaves individual income taxes untouched.

2. Rise in Minimum Wage

To help address rising living costs, the Chancellor announced a 6.7% increase in the minimum wage, taking it to £12.21 per hour for those aged 23 and over, effective from April 2025. This move is intended to deliver a financial uplift to lower-wage earners, with the government estimating that millions of households will benefit.

Moreover, younger workers, including those aged 16 to 17, will also see an 18% wage increase, reflecting the challenges faced by younger generations entering the workforce.

3. Enhanced Funding for the NHS

The NHS remains a top priority as it confronts service backlogs and operational pressures. This year’s Budget includes an additional £1.5 billion in NHS funding for 2025, primarily aimed at reducing waiting times and improving patient care. Reeves highlighted this investment as “a commitment to quality and access,” with a pledge to make healthcare more accessible across the UK and support a turnaround in NHS performance following years of underfunding.

4. Strategy for Reducing Public Debt

With no increase in income tax rates, the Chancellor stressed that national debt reduction would focus on adjustments within the business sector. Through these measures, Reeves seeks to establish a more balanced budget without direct impacts on individual taxpayers.

5. Social Services and Infrastructure Developments

Alongside healthcare, the Budget allocates resources towards enhancing public services and infrastructure. This includes funding to modernise transport networks, schools, and hospitals, which Reeves described as essential for supporting the UK’s long-term growth. These investments are part of Labour’s wider vision to “restore Britain’s foundations.”

6. Freeze on Fuel Duty

To ease the effect of fuel price increases on households and businesses, the Chancellor announced a freeze on fuel duty for the upcoming year. This is aimed at providing immediate financial relief amidst high energy costs.

7. Support for Green Initiatives

The Budget underscores the UK’s commitment to net-zero objectives with new funding and incentives for renewable energy projects and green technologies, particularly in the development of Carbon Capture and Storage (CCS) technologies. This funding is designed to foster innovation and create jobs within the green economy.

8. Changes to Capital Gains Tax (CGT)

The Chancellor revealed that the Capital Gains Tax (CGT) rate would rise to 18% for basic-rate taxpayers and 24% for higher-rate taxpayers. However, rates for gains on residential properties remain at 18% and 24%.

Despite these adjustments, Reeves noted that the UK will continue to hold “the lowest capital gains tax rate of any European G7 economy.”

What the 2024 Budget Means for the Public

For households across the UK, the Budget aims to provide immediate relief via wage increases and enhanced healthcare access, while businesses shoulder the bulk of revenue-generating measures. The rise in minimum wage will significantly benefit lower-income earners, while public investments in health and infrastructure promise long-term improvements in access and service quality. For businesses, however, these tax increases introduce new financial pressures, potentially impacting investment and recruitment as they adapt to the new fiscal environment.

Summary

The 2024 Autumn Budget reflects the government’s dual commitment to meeting immediate public needs and enacting a longer-term fiscal strategy. With its substantial NHS investments, targeted support for low-income workers, and a clear plan for deficit reduction, the Budget signals Labour’s approach to economic stewardship in challenging financial times. As the UK continues to address inflation and seeks financial stability, this Budget outlines a cautious yet forward-thinking path for the nation’s economy.

The full Grafene Accounting Budget summary will be available for download later today – check back soon to access it.