Businesses will need to consider some key changes in 2024 which need to go in their diaries…
Businesses will need to consider some key changes in 2024 which need to go in their diaries…
For small businesses, companies and employers there are a number of areas to watch out for which were listed in the Autumn Statement, the key ones of which are listed below;
Wages and salaries
Employers with younger workers on the payroll need to pay close attention to their ages, as the age requirements for the different statutory wage rates are changing for pay periods beginning on or after 1 April 2024. The new national minimum wage (NMW) rates are shown in the table below.
| Hourly rate from | Living Wage 21+ | Age 18 – 20 | 16 & 17 years olds | Apprentice rate |
| 01/04/24 | £11.44 | £8.60 | £6.40 | £6.40 |
| 01/04/23 | £10.42 | £7.49 | £5.28 | £5.28 |
From April 2024 all employees aged 21 and over will be entitled to the “living wage” – in other words the highest statutory rate, which was previously only paid to those aged 23 and over, meaning they get a 12.37% pay rise of £1.26 per hour. As an employer, you need to budget for this extra cost.
Employer national insurance – beware!
A date to put in your diary is 6 January 2024. This is when the primary class 1 NIC rate for your employees changes from 12% to 10% on earnings between £12,570 and £50,270 per year. Here at Kennedys Accounting, all customers for whom we process payroll will automatically be updated within our software. If you run your own payroll, you will need to ensure the payroll software has been updated before you run your January payroll, and check it is deducting the correct rate of class 1 NIC from employees.
Self-employed
The following changes need to go in the diaries of the Self-employed.
Firstly, the cash basis, rather than accrual will be the default option when submitting accounts for any size of unincorporated business from the tax year 2024/25. This simplifies accounting as accruals and pre-payments don’t have to be accounted for. The restrictions around deducting interest and loss relief will also be removed.
Next the main rate of class 4 national insurance (NI) you pay will be cut from 9% to 8% on profits up to £50,270 per year, also from the 2024/25 tax year. Profits above this threshold will continue to attract class 4 NI at 2%.
Finally, the Chancellor advised that class 2 NI will be abolished from 6 April 2024, but the NI credits to build up entitlements to benefits such as the state pension will remain.
Company cars
For some years, it has been tax efficient to purchase new electric cars within a company for both employees and directors. The company receives a 100% first-year deduction, and the employee had little or no benefit in kind to report and pay.
In the past two years the taxable benefit for a fully electric car has been 2% of the list price, but this is due to increase to 3% in 2025/26 and will reach 5% for 2027/28.
Dividends
Where a company pays dividends to shareholders those dividends should be paid before 6 April 2024 to take advantage of the £1,000 dividend allowance, as this allowance is cut to £500 per person from 2024/25. The rate of tax on dividends will remain at 8.75% within the basic rate band for 2024/25.