The Autumn Budget 2024 announces several changes to tax policy, and these have an impact on small businesses, self-employed people, and employers. In this article we go through some of the key changes affecting different types of business owners.

Business rates

Business rates are calculated by multiplying the rateable value of a business property by a “multiplier value” which is set by the government.

Rates relief for retail, hospitality and leisure properties

Eligible business properties relating to retail, hospitality, and leisure (RHL) based in England will receive 40% relief on their bill for business rates, up to a maximum of £110,000 per business. The RHL rate relief will become available in 2025/26 (6th April 2025 to 5th April 2026).

The government also announced plans to introduce permanently lower multipliers for Retail, Hospitality and Leisure (RHL) properties, starting from 2026/27 (6th April 2026 – 5th April 2027).

The small business multiplier

The small business multiplier used in England will remain frozen at 49.9p in 2025/26. The standard multiplier will increase to 55.5p.

Capital allowances

Capital allowances enable businesses to claim tax relief against the cost of owning and maintaining assets over a long period of time. Typical examples of this type of asset include cars or other vehicles, or things like machinery and equipment.

There are different types of capital allowances available, including first year allowances (FYA) which enable you to claim up to 100% of an asset’s value in the same accounting period you bought it. The government announced in the Autumn Budget 2024 that first year allowances will be extended for qualifying expenditure on zero-emissions cars, and on plant or machinery required for electric vehicle chargepoints.

Referred to as Green First Year Allowances in the Budget, this means the allowances will be available until:

• 31 March 2026 for corporation tax purposes
• 5 April 2026 for income tax purposes

Capital Gains Tax (CGT)

Capital Gains Tax, or CGT for short, is charged on the “gain” you make when you dispose of some types of asset. The rate of CGT charged on ‘main rate’ items (not including property) increased with effect from 30th October 2024.

 
Some businesses might be eligible to claim Business Asset Disposal Relief, which reduces the rate of Capital Gains Tax they must pay. The rate is currently set at 10%, but this will increase to 14% from 6th April 2025.

Corporation Tax

There are no changes to Corporation Tax, with the government promising to keep the tax rate capped at 25% for the duration of the Parliament.

Creative Industries tax relief: Updated rates and allowances

Further changes were announced for those operating within the creative industries designed to offer tax relief for innovative businesses in the sector. We’ve outlined some of the main changes below. Please note these changes were announced by the previous government in the Spring Budget 2024, and their reappearance in this Budget is to confirm they have been legislated.

Audio-Visual Expenditure Credit

There are several updates in this area, including:

• The credit rate available for the cost of visual effects in film and high-end TV will increase to 39% from April 2025
• Removal of the 80% cap for claiming visual effects costs in productions spending more than 5% of their total budget on visual effects

Independent Film Tax Credit

UK films with a UK lead writer or director and with a budget below £15 million will be able to claim an enhanced 53% rate of Audio-Visual Expenditure Credit, known as the Independent Film Tax Credit. Expenditure incurred from 1st April 2024 on films that began principal photography on or after 1st April 2024 is eligible.

Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums and Galleries Exhibition Tax Relief (MGETR)

From 1st April 2025 the rate of Theatre Tax Relief (TTR), Orchestra Tax Relief (OTR) and Museums and Galleries Exhibition Tax Relief (MGETR) will be permanently set at 40% for theatres, museums, and galleries (non-touring productions), and at 45% for all orchestra and touring productions.

Employers

There are several changes which will affect employers, including National Insurance, an increase to minimum wage, and new rules for reporting benefits in kind.

Employer’s National Insurance changes announced October 2024

From 6th April 2025:

• The rate of National Insurance employer’s must contribute increases from 13.8% to 15%
• Secondary Threshold (the point at which employers start paying National Insurance on an employee’s wages) decreases from £9,100 to £5,000
• The Employment Allowance (the allowance employers get on their NI bill) increases from £5,000 to £10,500

Employer’s National Insurance relief for veterans

The relief scheme which allows employers to hire qualifying veterans without making National Insurance contributions on earnings up to the Veterans Upper Secondary Limit of £50,270 for the first year of employment has been extended until 5th April 2026.

National Living Wage and National Minimum Wage changes from April 2025

Employers must pay the National Living Wage to employees who are aged 21 or older, and not in the first year of an apprenticeship. The Chancellor’s Autumn Statement 2024 announced that as of April 2025 the National Living Wage will increase from £11.44 to £12.21 per hour.

There are different rates for apprentices and workers who are aged 20 or younger. Known as the National Minimum Wage (NMW), these rules set the minimum hourly rate employers must pay younger employees and apprentices. These rates will also increase from April 2025.

• Apprentices and under 18s: £7.55 per hour
• 18 to 20 year olds: £10 per hour

The Budget also referred to the government’s intention to merge minimum pay bands into a single rate for all adults – something to watch out for in future announcements.

Reporting benefits in kind

Benefits in kind are the type of extra perks which some employers provide to staff. Because they technically increase the value of what an employee receives as payment, the equivalent value of some perks, such as company cars, are subject to tax. Like wages, employers must report these perks to HMRC so that employees can pay tax correctly.

Employers can currently report benefits in kind through a P11D form or through payroll. From April 2026, it will be mandatory to use payroll software to report these.

High Income Child Benefit Charge (HICBC) to be updated

The Autumn Budget 2024 introduced new measures to simplify paying the High Income Child Benefit Charge. Under current rules anyone eligible for HICBC must submit a Self Assessment tax return, but from April 2025 employed individuals will be allowed to pay the charge through their tax code. In plain terms, your tax code will reflect this and your take-home pay adjusted accordingly. Those who continue to use Self Assessment will find the section pre-populated by HMRC.

The Chancellor also reversed previous plans for HICBC to move to a system based on household income rather than individual.

Making Tax Digital for Income Tax Self Assessment (MTD ITSA)

The Budget referred to plans centred around the ongoing rollout of Making Tax Digital for Income Tax Self Assessment (MTD ITSA). The scheme is currently expected to launch from April 2026 for those with an annual turnover above £50,000, and then from April 2027 for businesses with a turnover more than £30,000.

In the Autumn 2024 Budget the Chancellor announced that rollout to businesses with an income above £20,000 will be planned and announced in the near future.

National Insurance for self-employed people and employees

National Insurance rates and thresholds will remain largely the same for employees and self-employed people, except:

• Lower Earnings Limit (LEL) increases from £6,396 to £6,500: Employees don’t pay National Insurance at this level, but earning above the limit allows them to earn NI ‘credits’ and accrue benefits such as the State Pension
• Small Profits Threshold (SPT) increases from £6,396 to £6,845: Rather like the LEL and employees, self-employed people don’t need to make National Insurance contributions on earnings at this level, but earning above the SPT entitles them to NI credits

Non-UK domiciled (non-dom) tax rules

The announcement to replace the current rules around non-UK domiciled individuals with a simpler system was first made in the Spring Budget 2024, but in October’s Budget the Chancellor confirmed plans to abolish the scheme altogether and replace it with a new regime with effect from 6th April 2025.

Paying tax

Starting from 6th April 2025, the late payment interest rate charged on unpaid taxes will rise by 1.5 percentage points.

Stamp Duty Land Tax

The rate of Stamp Duty Land Tax (payable in England) due on the purchase of second homes, buy-to-let residential properties, and companies buying residential property will rise from 3% to 5% with effect from 31st October 2024.

SDLT charged on the purchase of properties costing more than £500,000 by companies will also increase from 15% to 17%.

 
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