Northamptonshire-based people experts HR Solutions has highlighted 10 key points for employers following the Government’s Budget announcement on Wednesday (30^th October).

Chancellor Rachel Reeves revealed a number of significant changes in public finances in Labour’s first Autumn Statement in 14 years.

The long-awaited Budget set out the financial policies for public spending, and HR Solutions has indicated those that have greatest impact on employers.

1. New National Minimum Wage and National Living Wage

To accept the Low Pay Commission’s (LPC) recommendations for the National Minimum Wage (NMW) and National Living Wage (NLW). This means those aged 21 years and over will see a 6.7% increase in their pay to £12.21 per hour, which would equate to an increase of £1,400 for someone working full time.  Those between the ages of 18 and 20 will see the greatest increase of 16.3% taking the new pay rate to £10 per hour.  The scale of this increase is part of a longer-term plan to remove the age bandings and to have one level of minimum wage for all.  The new minimum pay rates will take effect from 1 April 2025.

 

2. National Insurance increase for employers

National insurance, and income tax will not be increased for employees; but employer’s national insurance will do.   It will increase by 1.2% to 15% and will take effect from April 2025.  The threshold at which employers will start to pay national insurance on a workers’ earnings will be lowered from £9,100 to £5,000.

 

3. Freeze on Income Tax thresholds to end

The freeze on income tax thresholds will end from 2028 and they will at this point be updated in line with inflation.

 

4. Increase to Employment Allowance

There will be an increase to the Employment Allowance aimed at helping small businesses and will in effect help to mitigate the rise in NI costs.  The allowance will increase from £5,000 to £10,000 and is expected to positively impact small employers, as it is expected that it will result in 865,000 small businesses not paying any NI next year.

 

5. Get Britain Working

The Government will shortly publish the “Get Britain Working” white paper, designed to get those who are unemployed back into work.  It is expected that this paper will be published later in the Autumn.  The Chancellor spoke about this paper in advance of last week’s Budget, which you can see the announcement here.

 

6. Carer’s Leave Allowance

The carer’s leave allowance earnings limit will increase, meaning that more people will be entitled to receive financial support.

 

7. Fuel Costs

Employees will also see fuel costs remain the same, as a freeze on fuel duty next year has been announced

 

8. Greater Protection for Employees

It was reiterated that there should be greater protection from unfair dismissal, safeguarding workers from workplace bullying.

 

9. Family Leave

Improved access to paternity and maternity leave.  You can read our recent article “Labour Government – employment changes 2024” here.

 

10. Relief for retail

Retail and hospitality businesses will receive 40% relief on business rates up to a cap of £25,000

HR Solutions Operations Director Sue Watson said: “Increasing the National Living Wage puts additional pressure on businesses that are already struggling post pandemic, especially in hard hit industries such as hospitality. However, in the long run, the increase will help employees tackling the ongoing cost-of-living crisis, boost staff motivation and productivity and improve workforce morale.

“The new Autumn Statement gives workers more protection from unfair dismissal, and safeguards workers from bullying in the workplace. There will also be improved access to paternity and maternity leave which, as a company that champions equal rights and family friendly policies, we welcome wholeheartedly.”

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