Autumn Statement

The much anticipated Autumn Statement has been delivered. We have summarised below the relevant sections for us as a community of businesses. Whilst larger businesses will bear the brunt of the NIC increase small businesses received a cushion in the increase in employment allowance. We will see over time if the reset works.

EMPLOYERS NATIONAL INSURANCE 

Employers NI increases from 13.8% to 15% on salaries exceeding £5,000 from April 2025. But for eligible companies the first £10,500 will now be relieved, previously £5,000. The composition of each payroll will determine if the overall cost will increase. As a guide, a 6 person payroll with salaries around £40k will be little affected. We will work with our payroll clients to optimise tax efficiency where possible. 

BUSINESS RATES

In 2025/2026 the business rate relief provided to eligible retail, hospitality and leisure businesses will decrease from 75% to 40%, a 140% increase of the business rates bill payable. 

NATIONAL LIVING / MINIMUM WAGE INCREASES IN APRIL 2025

In April 2025 the National minimum wage will increase to £12.21/hr; for 18-20 year olds to £10.00/hr and under 18s to £7.55/hr. This will have a significant impact particularly on the hospitality industry.

INHERITANCE TAX
The big change, planned for 2027, is that unused pensions will form part of your estate and therefore be subjected to inheritance tax (IHT). Currently if the donor dies before 75 years of age their pension is passed on completely tax free and only if the donor is older than 75 does the recipient pay income tax on the pension in drawdown. There is no charge to inheritance tax. There is much speculation around whether there will be both IHT and then income tax on certain inherited pensions. This will be ironed out during the consultation period. 

CAPITAL GAINS TAX
CGT rates on most asset disposals were increased effective immediately. The lowerrate has increased from 10% to 18% and the higher rate from 20% to 24%. BusinessAsset Disposal Relief increases to 14% for disposals after April 2025 and 18% fordisposals after April 2026.

CHILD BENEFIT CHANGES REVERSED
The planned 2026 reform to the child benefit scheme has been scrapped. This is a taxable benefit which will continue to be assessed on the income of the highest earning member of a household. 

FISCAL DRAG
Most thresholds have remained the same meaning that inflationary price/payrollrises drag more taxpayers into paying more tax.