Autumn Budget 2024: Potential Changes for UK Employers and Employees

UK Autumn Budget 2024 potential changes affecting employers and employees in tax, wages, and workplace regulations.

The Labour government, having taken office in 2024, is set to release its first major fiscal plan with the Autumn Budget 2024, scheduled for 30th October 2024. This budget, which is sometimes referred to as the autumn statement, will be closely watched for the significant changes it is expected to bring, particularly in areas that directly impact employers and employees. With the UK facing economic challenges such as rising inflation and the cost-of-living crisis, the Autumn Budget 2024 is likely to introduce reforms in taxation, National Insurance, wage policies, and workplace regulations.

The government’s priorities will centre around improving income equality, reforming tax structures, and providing relief for businesses, especially small and medium-sized enterprises (SMEs). For employers, staying ahead of these changes is critical for managing payroll, workforce development, and compliance with new legal requirements. Similarly, employees should be aware of how these adjustments will affect their take-home pay and job security.

As we explore potential reforms, it’s important to note that while many of these changes remain speculative, Labour’s past commitments and recent discussions—such as those in the CIPD Resourcing & Talent Planning Report 2024—provide clues about the direction the government may take.

When is the Autumn Budget 2024?

The Autumn Budget 2024 will be delivered by Chancellor Rachel Reeves on 30th October 2024. This will be Labour’s first comprehensive budget since taking power, and it is expected to include significant updates aimed at addressing the UK’s economic challenges. Previously referred to as the autumn statement, this financial event marks a key moment for employers and employees as it will likely shape the economic landscape heading into 2025.

With Labour promising bold reforms, the budget is expected to impact key areas like taxation, National Insurance contributions, the minimum wage, and more. Businesses should be prepared for potential changes in their financial obligations, while employees may see adjustments that affect their personal finances and job benefits.

For employers and HR professionals, resources like Talk Staff’s services can offer critical support in adapting to new budget-related requirements, from wage changes to tax compliance.

Tax Band Adjustments: Will the Autumn Budget 2024 Bring Relief?

The personal tax system in the UK has remained largely unchanged for several years, with the 1257L tax code—representing a £12,570 personal allowance—holding steady despite rising inflation and wage growth. Many are hoping that the Autumn Budget 2024 will bring much-needed reforms, particularly in revising tax bands to provide relief for middle-income earners and address the problem of fiscal drag.

Labour is expected to consider increasing the personal allowance and the higher-rate tax threshold to ease the tax burden on employees, many of whom have seen their take-home pay shrink in real terms due to wage stagnation. For employers, this could have indirect benefits, making it easier to retain employees who feel less financially strained.

However, as highlighted in the CIPD Resourcing & Talent Planning Report 2024, much of this remains speculative, and employers will need to wait until 30th October to see the exact details of the tax reforms. Changes to tax bands could also influence business payroll management, affecting everything from wage negotiations to employee retention strategies.

Employer National Insurance Contributions: Potential Reforms Ahead

National Insurance Contributions (NICs) remain a major financial obligation for UK employers. At present, the employer contribution rate stands at 13.8% for earnings over £9,100 per year, a significant expense for many businesses, especially SMEs. The Autumn Budget 2024 may introduce reforms aimed at reducing this burden, particularly for smaller businesses.

One possible reform could involve raising the Employment Allowance, currently set at £5,000, allowing businesses to claim back more from their NICs bill. Alternatively, Labour may introduce a more progressive National Insurance structure, in which larger businesses contribute more, while SMEs enjoy reduced rates or exemptions.

Changes to National Insurance could also affect employees, with Labour potentially reversing the recent increases in NICs for higher earners. If Labour chooses this route, the resulting boost in disposable income for employees could positively impact consumer spending and overall economic growth.

Employers should prepare for these potential changes by reviewing their payroll systems and ensuring they are ready for any adjustments in NICs. Talk Staff offers valuable HR support to help businesses navigate these changes and comply with new regulations.

Minimum Wage Increases: A Core Labour Priority

Labour has long championed the cause of higher wages for workers, and the Autumn Budget 2024 is expected to deliver a significant increase in the minimum wage. Currently, the National Living Wage is £10.42 per hour, but Labour has indicated that it could rise to £12 or more, reflecting the party’s commitment to reducing income inequality.

For employees, especially those in lower-paid sectors such as retail and hospitality, this increase will be a welcome boost. However, employers—particularly those operating on narrow profit margins—may find it challenging to absorb the increased wage bill. Labour could introduce compensatory measures such as grants or tax relief to help businesses transition to the higher wage rates.

According to the CIPD Resourcing & Talent Planning Report 2024, one area of focus for employers will be adjusting their staffing strategies to manage these costs without sacrificing productivity. Many businesses may need to explore options such as automation or restructuring to keep costs under control.

For employers needing support in managing workforce changes, Talk Staff’s HR services can offer guidance on how to adapt to the new minimum wage requirements while maintaining a strong, motivated workforce.

Growth and Skills Levy: A New Era for Apprenticeships?

At the recent Labour Party conference, Prime Minister Keir Starmer announced a major overhaul of the apprenticeship system in England. One of the standout changes is the introduction of the “growth and skills levy”, which will replace the existing apprenticeship levy. This new initiative aims to make apprenticeships more accessible and better aligned with the needs of both businesses and young people.

Under the current system, apprenticeships are required to last a minimum of 12 months, which has limited flexibility for employers and discouraged shorter, more focused training programmes. The growth and skills levy will change this by funding shorter apprenticeships, allowing businesses to tailor training to their immediate needs without the lengthy time commitment. This flexibility will be particularly important for sectors with rapidly changing skill requirements.

The reforms also include the introduction of foundation apprenticeships, aimed at young people, providing them with an opportunity to “earn a wage while developing vital skills.” Additionally, the government is encouraging businesses to invest in Level 7 apprenticeships—equivalent to master’s degrees—without having to rely solely on levy funding.

A report by Skills England revealed that 1 in 10 roles in the UK are in critical demand, and more than 90% of these require specific training or education. To address this skills gap, the government has tasked Skills England with determining which training programmes will be eligible for funding based on priority needs across industries.

This reform is part of a broader initiative to rebalance the UK’s training system by placing more emphasis on youth employment, ensuring young people have the skills needed for the future while aligning training investments with business demands. Employers keen to capitalise on this new system should start planning now.

For companies looking to navigate these changes and optimise the use of the new growth and skills levy, Talk Staff’s workforce management services can provide the expert guidance necessary to maximise the benefits of the reformed system. Learn more here.

Workplace Allegations and Compliance: Preparing for the Worker Protection Act

The Worker Protection (Amendment of Equality Act 2010) Act 2023 has introduced significant new legal requirements for handling workplace allegations of harassment and discrimination. Starting from 26 October 2024, employers will need to adopt more proactive measures to ensure a safe working environment and protect employees from third-party harassment.

The Autumn Budget 2024 may introduce further regulations aimed at strengthening employee protections, particularly for gig economy workers and those on zero-hours contracts. Employers will need to ensure they have robust policies in place to comply with these new laws, which could carry hefty fines for non-compliance.

Talk Staff offers HR support to help businesses manage these legal responsibilities effectively, ensuring compliance with both the Worker Protection Act and any new regulations introduced in the Autumn Budget 2024.

FAQs

When is the autumn budget 2024?
The Autumn Budget 2024 will be delivered by the Chancellor on 30th October 2024. This will be Labour’s first full budget and is expected to introduce significant reforms affecting taxation, wages, and workplace policies.

What tax changes are expected in the Autumn Budget 2024?
It is anticipated that Labour will raise the personal allowance and higher tax thresholds, providing relief to middle-income earners while addressing fiscal drag.

Will National Insurance contributions change in the autumn budget?
Labour may reduce employer National Insurance contributions, particularly for small businesses, by increasing the Employment Allowance or introducing a tiered system.

How much will the minimum wage increase in 2024?
The Autumn Budget 2024 is expected to raise the minimum wage to at least £12 per hour, reflecting Labour’s commitment to reducing wage inequality.

What reforms are likely for the apprenticeship levy?
Labour could simplify the apprenticeship levy, making it easier for businesses to access funds and expanding the range of training that can be supported.

What legal changes are coming for workplace allegations?
From 26 October 2024, employers must comply with new legal requirements under the Worker Protection (Amendment of Equality Act 2010) Act, ensuring stronger protections against workplace harassment.

Conclusion: Where Changes to the Autumn Budget 2024 will be seen

The Autumn Budget 2024, scheduled for 30th October, is expected to bring significant changes for employers and employees alike. From potential reforms to tax bands and National Insurance contributions to increases in the minimum wage and changes to workplace regulations, this budget will reshape the employment landscape in the UK. Employers should be ready to adapt to these new financial and legal demands while ensuring their workforce remains motivated and compliant.

For businesses seeking to navigate these changes, services like those offered by Talk Staff—including workforce management and HR support—can provide invaluable assistance in preparing for the future.