Autumn Statement - a tough Budget for business

30 October 2024

Reacting to the Chancellor’s Autumn Budget, Shevaun Haviland, Director General of the BCC, said:  “This is a tough budget for business to swallow but the Chancellor has looked to ease the pain by holding out a promise of better days ahead.

“While some protection for smaller firms is welcome, the increase in employer National Insurance Contributions will place a further cost burden on business. This, coupled with a 6.7% increase in the National Living Wage, means many firms will find it more challenging to invest and recruit in the short-term.

“But the Chancellor has looked to off-set the upfront hit on firms by outlining a longer-term framework to provide stability for the economy.

“Plans to raise infrastructure spending, sector-specific business rates relief and additional support for small business will take some of the sting out of the tax rises. And it is encouraging to see full expensing and the annual investment allowance made permanent alongside R&D relief being retained.

“The Chancellor has also listened to our request to retain first year allowances for investments in the North Sea to help provide a just transition to net zero.

“Much now rests on the Government’s next steps, with the future benefits outlined by the Chancellor by no means guaranteed. A lot will be riding on the success of the Industrial and Trade strategies and the effectiveness of devolution and public investment in infrastructure to reinvigorate regional supply chains.

“To build business confidence, it’s crucial that we now see decisive and inclusive action at pace from the Government to unlock the investment the economy sorely needs.”

Some key points from the Autumn Statement at a glance:

• Firms to pay National Insurance on workers’ earnings above £5,000 from April, down from £9,100 currently, with the rate increasing from 13.8% to 15%
• Employment allowance – which allows companies to reduce their NI liability – to increase from £5,000 to £10,500
• Two new lower bands to be created for Business Rates specifically to help the retail, hospitality and leisure sectors, to be introduced from 2026/27
• Business Rates Relief of 40% for eligible retail, hospitality and leisure businesses, up to a cap of £110,000 per business from April next year – down from the current 75% relief rate
• Tax paid by private equity managers on share of profits from successful deals to rise from up to 28% to up to 32% from April
• Main rate of corporation tax, paid by businesses on taxable profits over £250,000, to stay at 25% until next election
• Legal minimum wage for over-21s to rise from £11.44 to £12.21 per hour from April
• Rate for 18 to 20-year-olds to go up from £8.60 to £10, as part of a long-term plan to move towards a “single adult rate”
• Eligibility widened for the allowance paid to full-time carers, by increasing the maximum earnings threshold from £151 to £195 a week
• For those aged 16 or 17, the minimum wage will rise from £6.40 an hour, to £7.55
• The separate apprentice rate which applies to eligible people under 19 – or those over 19 in the first year of an apprenticeship – will also increase from £6.40 an hour, to £7.55
• 5p cut to fuel duty on petrol and diesel, due to end in April 2025, kept for another year
• 11 new hydrogen projects to be created across the UK, with Aberdeen confirmed as the base for the new GB Energy organisation