Today the Chancellor of the Exchequer, the Right Honourable Rachel Reeves MP, has announced a series of changes to the UK Tax regime in the Autumn Budget. 

The Chancellor has fulfilled the manifesto promise to not increase the headline taxes of Income Tax, VAT and employees’ National Insurance Contributions (NICs). However, there are changes to employers’ NICs increasing the rate by 1.2% to 15% and the secondary threshold at which employers begin to pay NICs will be reduced from £9,100 to £5,000. The employers’ NICs increase will take effect on 6 April 2025.

The Employment Allowance, which minimises the NIC bill for eligible businesses, will be increased from £5,000 to £10,500. This will increase the number of employers who will pay no NICs at all and represents NIC savings equivalent to the employer NICs for four full time employees paid at the rate of the national living wage per year.

The National Living Wage (NLW) will be increased on 6 April 2025 to £12.21, an increase of 6.7%, for adults over 21. The Chancellor has made steps to equalise the NLW rates for all working adults, for now increasing the rate for 18-20 year olds to £10 per hour from £8.60, with a view to bringing them in line with 21 year olds in the near future.

The Chancellor has also pledged to maintain the incentives encouraging electric vehicles in company car schemes.