Autumn Budget 2024: Key Updates
National Living Wage: A 6.7% increase for workers aged 21 and over, rising to £12.21 per hour from April 2025.
Young Workers: The minimum wage for 18-20-year-olds will see a significant jump of 16.3%, increasing to £10 per hour.
Apprentices: A 17.9% pay boost, bringing the wage to £7.55 per hour.
National Insurance (Employer Rate): Set to rise to 15%, with the threshold dropping from £9,100 to £5,000.
Employment Allowance: Will double, increasing from £5,000 to £10,500.
Fuel Duty: No increase, with a 5p per litre cut extended for another year.
Key Budget Updates for the Self-Employed:
Corporation Tax: The rate remains unchanged at 25%, with the Small Profits Rate and marginal reliefs staying as is.
Dividend Tax Rates: No changes to the rates or allowances.
Employer NICs: An increase to 15%, but with the Employment Allowance rising to £10,500.
Personal Tax Allowance: Frozen until 2028, after which it will increase.
What the Changes to Employer NICs Mean for the Self-Employed:
While Employer National Insurance Contributions (NICs) don’t apply directly to self-employed individuals, the changes have important implications for freelancers and small business owners.
Starting from April 2025, the Employer NICs rate will rise from 13.8% to 15%. Additionally, the threshold at which these contributions kick in will drop significantly—from £9,100 to £5,000 in earnings per employee.
For businesses thinking of expanding by hiring staff, the Employment Allowance could help offset the impact of these changes. This allowance allows eligible businesses to reduce their total NICs bill by up to £5,000—set to rise to £10,500 from April 2025, and extended to cover businesses with larger NICs liabilities.
While these adjustments might increase costs for employers, the new Employment Allowance offers relief for smaller businesses navigating the increase in Employer NICs.
