Autumn Budget 2024 – Employment Highlights | BCLP

Increase in employers’ NI

• Employers’ national insurance contributions will increase by 1.2% to 15% and the threshold for businesses to start paying National Insurance will be reduced from £9,100 to £5,000 with effect from 6 April 2025.
• Employment Allowance, which allows businesses to reduce their NI liability, will be increased from £5,000 to £10,500 and the £100,000 eligibility threshold will be removed. This appears to be an attempt to support smaller businesses with the 15% increases mentioned above. According to the Chancellor, this means 865,000 businesses will pay no NIC at all, and more than half of employers with NIC liabilities will either see no change or gain across the board next year.
• The increase in employers’ NI contributions will lead to an increase of £25 billion each year by the end of the forecast period.

increase in NMW

• The statutory minimum wage for the National Living Wage for over-21s will increase by 6.7% to £12.21, the equivalent of £1,400 a year for an eligible full-time worker.
• Additionally, as part of the long-term plan to move towards a single adult ratio:
• £1.40 increase for 18-20 year olds (from £8.60 to £10.00 per hour); And
• £1.15 increase for 16-17 year olds and apprentices (from £6.40 to £7.55 per hour)
• The Accommodation Offset rate will also increase to £10.66 per day.

These both represent significant increases, and the National Minimum Wage increase is one of the first examples to follow Labor’s manifesto promises. But neither measure is likely to appeal to employers. Smaller employers in certain sectors may benefit from changes to Employment Allowance, but the same employers may not be too happy with increases in the minimum wage, as they are often the ones who tend to employ young people on the minimum wage.

unemployment rates

Increasing the number of people in employment is a big part of the government’s plan to stimulate growth. The Labor Party has announced its goal of reaching an 80% employment rate in the long term. As part of the “Get Britain to Work” White Paper, the government is investing £240 million to find new ways to get people back to work.