The Autumn Budget 2024: New tax hikes for employers

Whilst the Labour government maintain that their budget has not raised taxes for ‘working people’, this certainly cannot be said about the taxes for employers of working people who have been hit with both an increase in the rate of employer National Insurance Contributions (from 13.8% to 15%) and a lowering of the threshold at which payments are due (from £9,100 to £5,000).

Employers will also note the announcement that the National Minimum Wage will increase from £11.44 to £12.21 in April 2025.

Clearly, it isn’t possible to conceive of a budget that will make everybody happy (as there will always be hard choices that lead to the perception of ‘winners and losers’) and there has been no shortage of critics of the Chancellor contending that the net effect of this budget will be to encourage employers to reduce or freeze both recruitment activity and pay increases (thereby passing the increased costs onto their staff) and will, potentially, lead to increased redundancies as part of employers’ anticipated cost-cutting drives.

Those who argue that employers will be disincentivised from taking on new staff can also point to what they regard as a significantly increased regulatory burden on employers (i.e. more red tape) that is coming down the track as a result of the Government’s Employment Rights Bill, which is currently being debated in parliament.

It will remain to be seen whether the nay-sayers’ prophecies of doom prove accurate or whether, as the Government and (amongst others) the trade unions say, these concerns are overblown and the budget and the Employment Rights Bill will in fact be remembered chiefly for improving the lives of millions of working people across the country.

If you have any questions, please call our Employment Law team today on 0113 207 0000.

*Blacks Solicitors does not provide financial advice and the content of this blog post is for informational purposes only.