As part of the finance team, you will be required to keep up with the latest changes to tax legislation. As a firm, we at Mercer & Hole work with a wide range of businesses across a plethora of industry sectors, so we understand the pressures and the responsibilities involved.
The Autumn 2024 Budget brought the biggest shakeup in over ten years with many changes to taxation affecting all businesses. We have put together this succinct summary to document each update, and to ensure that you can prepare for the changes that are coming soon.
Employee remuneration, benefits, and incentives
Increases to employer National Insurance rates
As widely publicised, with effect from 6 April 2025, the rate of employer National Insurance (NI) contributions on wages and salaries will increase by 1.2 percentage points from 13.8% to 15.0%.
At the same time, the Secondary Threshold (the level above which employers become liable for employer NI contributions) is being lowered from £9,100 to £5,000.
These changes also coincide with an increase in the National Minimum Wage (see below).
Whilst the government is also increasing the Employment Allowance from £5,000 to £10,500 (and removing the restriction that only businesses with an annual NI liability of £100,000 or less can benefit) this is likely to do very little to negate the increased cost effect of the other changes for the majority of businesses.
This will not only have an impact on your payroll budget; you are also likely to see increased charges from your suppliers who will be experiencing increased costs themselves due to these changes.
The business will, therefore, need to factor in these increased costs when planning its forecasts and it should consider how much of the additional costs can be passed on to customers in the form of price increases.
