By
Beatriz Jardim
October 31, 2024
The recent Autumn Budget 2024 has introduced several tax reforms and policy changes impacting UK businesses, employers, and investors. These changes address economic challenges while updating National Insurance Contributions (NICs), benefits reporting, and company vehicle regulations. Here’s an in-depth look at the key points every business owner, landlord, and investor should know.
Secondary Class 1 National Insurance Contributions: Important Changes Ahead
What’s Changing?
The rate of employer National Insurance Contributions (NICs) will increase from 13.8% to 15%, effective 6 April 2025. In addition, the Secondary Threshold (the point at which employers must start paying NICs) will be reduced from £9,100 to £5,000 per year. This change will stay in place until 6 April 2028, after which it will increase in line with Consumer Price Inflation (CPI).
How This Affects You
This increase will impact payroll costs for UK employers. While the Employment Allowance, currently available for businesses with an NICs bill of £100,000 or less, will rise from £5,000 to £10,500, this will expand eligibility to a larger range of businesses from April 2025. However, understanding how this change aligns with your hiring plans and salary structures will be key.
Tip: Plan ahead for these increases in NICs by reassessing your payroll structure and ensuring that you are maximizing your Employment Allowance benefits.
Mandatory Reporting of Benefits in Kind Through Payroll Software
What’s Changing?
From April 2026, employers will be required to report and pay tax on benefits in kind via payroll software. This applies to Income Tax and Class 1A NICs.
How This Affects You
With the mandatory use of payroll software, businesses will need to streamline their reporting processes. This change will require employers to accurately track and report all benefits provided to employees, such as health insurance, company cars, or any non-cash benefits.
Tip: If you haven’t already, consider implementing or upgrading payroll software to ensure compliance with the new requirements and to ease your administrative burden.
Veterans’ NIC Relief Extended
What’s Changing?
The government has extended the NIC relief for businesses hiring qualifying veterans. From 6 April 2025 to 5 April 2026, employers hiring veterans in their first civilian role can continue to benefit from zero employer NICs on annual earnings up to £50,270.
How This Affects You
Businesses looking to support veterans will continue to benefit financially from reduced NICs. This extension encourages hiring veterans and can serve as an incentive for businesses committed to supporting those transitioning from military to civilian life.
Tip: If your company is considering hiring veterans, explore the NIC relief available to reduce costs and support valuable additions to your workforce.
Changes to Ownership Trusts and Employee Benefit Trusts
What’s Changing?
The Autumn Budget has introduced reforms to prevent tax avoidance within Employee Ownership Trusts (EOTs) and Employee Benefit Trusts (EBTs). These changes take effect from 30 October 2024.
How This Affects You
For businesses using these trusts to encourage employee ownership, it’s essential to understand the new regulations to remain compliant. These reforms aim to prevent misuse while ensuring that EOTs and EBTs remain focused on rewarding employees fairly.
Tip: Consult with your accountant or legal advisor to confirm that your EOT or EBT structure aligns with the updated regulations.
New Rules for Umbrella Companies
What’s Changing?
In response to tax avoidance and fraud within the umbrella company market, recruitment agencies will now be responsible for accounting for PAYE payments made to workers via umbrella companies, effective 6 April 2026. If there is no agency, this responsibility falls on the end client.
How This Affects You
This shift aims to reduce abuse within umbrella company arrangements. If your business uses or operates through an umbrella company, ensure your PAYE compliance to avoid penalties.
Tip: Take time to review all umbrella company arrangements in your business to ensure compliance with the new rules ahead of 2026.
Vehicle-Related Tax Changes: Double Cab Pick-Up Trucks and Loopholes
What’s Changing?
Double cab pick-up trucks (DCPUs) with a payload of one tonne or more will now be treated as cars for capital allowances, benefits in kind, and business profit deductions. This rule applies from 1 April 2025 for Corporation Tax and 6 April 2025 for income tax.
The government is also addressing loopholes where company cars are sold to employees through tax-advantaged arrangements. Changes to curb this practice will take effect from 6 April 2026.
How This Affects You
These changes will impact tax deductions and benefits for businesses using DCPUs or those involved in car ownership arrangements. It’s important to review vehicle classifications and ensure compliance with the new tax guidelines.
Tip: Businesses owning company vehicles should check the impact of these rules on current and future vehicle purchases.
Adjustments to Company Car Tax (CCT) Rates
What’s Changing?
Starting in the 2028–2029 tax year, CCT rates will rise by 2% for zero-emission vehicles (ZEVs) and by 1% for all other vehicles. By 2029–2030, ZEVs will increase by another 2%, and other vehicles by 1%, up to a maximum rate of 39%.
How This Affects You
If your business operates company cars, especially ZEVs, anticipate these increased costs in CCT. This is an effort to equalize tax treatment across vehicle emissions, and it may influence your decisions around company vehicles.
Tip: Consider future CCT rates when evaluating whether to lease or purchase vehicles, particularly ZEVs.
Property Owners and Investors: Key Points from the Budget
For landlords and property investors, the Autumn Budget 2024 did not feature specific tax incentives, but vehicle and trust-related measures could indirectly impact property-focused businesses. If using vehicles or EOTs within your business structure, ensure compliance with these new regulations.
Conclusion
The Autumn Budget 2024 has introduced several significant changes that UK business owners, landlords, and investors should be aware of. From NIC rate adjustments and benefits reporting mandates to vehicle-related tax shifts, these updates require planning and compliance.
To best prepare, now is an ideal time to speak with your accountant or financial advisor to navigate these changes, ensuring your business remains compliant and benefits from available reliefs. Remember, proactive planning can help minimise disruptions and maximise tax efficiency in the long term.
By staying informed and seeking guidance, UK business owners can confidently navigate the latest Autumn Budget updates, ensuring they continue to grow while meeting regulatory requirements.
This blog provides a professional overview of key Autumn Budget 2024 changes. For detailed advice on how these updates may affect your specific circumstances, consider consulting with your accountant or financial advisor.
