October 30, 2024
The hammer has fallen – the October budget is here! As predicted in our previous blog post, the Chancellor has announced a number of changes that will impact businesses, including:
- Changes to National Insurance contributions: We predicted a potential increase in National Insurance contributions, and this came to fruition. Businesses will now need to factor in a 1.2% increase into their National Insurance contributions, impacting both employer and employee costs.
- Corporation Tax update: While the exact details are still emerging, the Chancellor confirmed that the main rate of corporation tax, paid by businesses on taxable profits over £250,000, will stay at 25% until the next election. This will have a direct impact on business profits.
- National Minimum Wage:
– The minimum wage for over 21s, known officially as the National Living Wage, will rise by 6.7%, from £11.44 to £12.21 from April 2025. This year, it increased to £11.44 an hour, from £10.42.
– For 18 to 20-year-olds, the minimum wage will rise from £8.60 to £10. In April this year, the rate was increased from £7.49.
– Apprentices will get the biggest pay bump, from £6.40 to £7.55 an hour. Prior to this year, it was £5.28.
– The Treasury said a big hike in the minimum wage for under-21s – the largest on record – marked the first step towards a single rate for all adults.
– It comes after the government instructed the Low Pay Commission, which recommends minimum wage rates, to include the cost of living in its calculations.
Preparing for the Changes: A Proactive Approach
While the full picture of the budget’s impact is still unfolding, businesses can take proactive steps to navigate these changes:
- Financial review: Conduct a thorough review of your current financial situation. Understanding how the budget changes affect your bottom line is crucial for making informed resource allocation decisions.
- Contract and policy updates: Ensure your contracts and company policies are up-to-date with any new employment law changes. This minimises potential legal issues in the future.
- Employee communication: Keep your employees informed about the budget changes and how they might affect them. Open communication helps reduce anxiety and confusion.
Beyond the Budget: Unveiling Opportunities
The impact of the budget extends beyond immediate adjustments. Consider these additional factors:
- Industry-specific impact: How will the budget changes affect your specific industry? Analyse the implications for your sector and identify potential adjustments you can make.
- New opportunities: The budget may create new opportunities. Can you adapt your business model to capitalise on these?
Emerging Stronger: Planning is Key
By taking a proactive and well-planned approach, businesses can mitigate the disruptions caused by the October budget and leverage it as a springboard for growth.
Additional Tips:
- Stay informed: The government will likely release further details regarding the budget in the coming days. Follow government websites and trusted business news sources to stay updated.
- Seek professional advice: If you’re unsure about the impact of budget changes on your business, don’t hesitate to seek advice from a qualified accountant or lawyer.
Budget Effects on Recruitment
- Companies to pay National Insurance on workers’ earnings above £5,000 from April, down from £9,100 currently, with the rate increasing from 13.8% to 15% so making the right hire is key
- Employment allowance – which allows companies to reduce their NI liability – to increase from £5,000 to £10,500
- Staff travelling to work via the bus will have increased travel costs.
- Are you, in fact, better off using seasonal temps if your order book is sporadic? This way, you can increase headcount without full employer commitment.
Are you ready to take your business to the next level with a reliable and experienced recruitment partner?
Contact CMD Recruitment today to learn more about how we can support your hiring needs.
We offer a variety of services, including:
- Executive search
- Permanent placement
- Contract Staffing
- Recruitment process outsourcing
By partnering with CMD Recruitment, you can benefit from our expertise, extensive network, and commitment to delivering exceptional results. We understand the unique challenges businesses face in today’s competitive market, and we are dedicated to helping you achieve your recruitment goals.
Back to Blog