Your guide on what the Autumn Budget means for employers, and employees, in under three minutes.

Introduction

Welcome to our summary of the Autumn Budget 2024. This update provides key insights and changes announced by the UK government that are relevant to employers. Our focus includes Pensions, Inheritance Tax, National Living Wage and National Insurance.

Key Changes for Employers Overview

Pension Funds: It is proposed that from 6 April 2027 pension benefits that pass on death will be included in the deceased's estate for inheritance tax ("IHT") purposes. This is currently in consultation which will close January 2025. It is not clear if this will affect Death in Service schemes written under a pension trust.

National Insurance Change: Secondary Class 1 NICs (Employer NICs) – The government will increase the rate of employer NICs from 13.8% to 15% from 6 April 2025. The Secondary Threshold is the point at which employers become liable to pay NICs on employees’ earnings and is currently set at £9,100 a year. The government will reduce the Secondary Threshold to £5,000 a year from 6 April 2025 until 6 April 2028, and then increase it by Consumer Price Index (CPI) thereafter.

National Living Wage increase: From April 2025 the National Living Wage will increase to £12.21 per hour for all eligible employees, and the National Minimum Wage for 18–20-year-olds will increase to £10.00 per hour for all eligible workers. The government is also increasing the minimum wages for Under 18s and Apprentices to £7.55 per hour, and the Accommodation Offset rate will increase to £10.66 a day.

Conclusion

While the budget claims not to have made “workers” worse off the additional costs to employers are significant. We feel that this will almost certainly affect employees indirectly as employers strive to make savings within the business.

Please contact us to discuss using Salary Exchange to save national insurance on employee pension contributions

Ask us for updates/advice on Death in Service as these are commonly written under a pension trust. In the past these have been subject to pension ‘tax’ as unforeseen consequence of legislation.

Disclaimer - The purpose of this is to give general information on the subject matter presented and this is not to be deemed as advice. This is based on the current government legislation and may change at any time in the future.

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https://www.fidelius.co.uk/employee-benefits