The 2024 Autumn Budget continues to make headlines as businesses and individuals around the UK digest several significant changes to tax and the economy.
Many self-employed individuals will wonder how these changes will impact them as individuals and businesspeople. Self-employed people typically face greater economic risk and income volatility than salaried workers, so an increased interest in budget matters is expected.
The good news is that much of the raft of changes announced in the Autumn Budget statement will have little direct or immediate impact on the tax affairs of most self-employed people.
However, it is advisable to consider all changes announced, even if they are only indirectly linked to self-employed people. After all, the overall economy affects everyone.
Employer’s NIC rate and allowance changes
Many self-employed traders have employees of their own. These people may be affected by the following changes:
- The employer rate of National Insurance on wages and salaries, as well as expenses and benefits, will increase from 13.8% to 15% from 6 April 2025, and the starting threshold above which it is paid will drop from £9,100 to £5,000 per annum.
- The Employment Allowance lets businesses, including self-employed, with employer NIC bills of £100,000 or less from the previous tax year to reduce their bill by £5,000. From April 6, 2025, this allowance is growing to £10,500. The government will also remove the £100,000 limit, making it available to all eligible employers with employer NIC bills. For self-employed traders with a very small number of employees this may fully compensate them for the underlying increase or even reduce their overall NIC bill.
- There will also be changes to the National Minimum Wage and National Living Wage from April 2025, as seen below.
|
NLW |
18-20 |
16-17 |
Apprentices |
|
|
From 1 April 2025 |
£12.21 |
£10.00 |
£7.55 |
£7.55 |
Inheritance Tax - Business Property Relief
From April 2026, both agricultural and business properties will continue to be eligible for 100% Inheritance Tax relief, but only if their total value does not exceed £1 million.
This £1 million limit is a combined threshold that applies to the total of both types of property—agricultural and business.
If the combined value of the properties exceeds this limit, any amount above £1 million will qualify for a 50% relief on the inheritance tax. This means that only half of the value exceeding the limit would be subject to tax.
Changing treatment of double cab pick-up vehicles
Starting on 1 April 2025, the government will classify double cab pick-up vehicles (DCPUs) with a payload of one tonne or more as cars for specific tax purposes.
This classification will apply to Corporation Tax from 1 April 2025 and to Income Tax from 6 April 2025.
As a result, DCPUs will be subject to the same rules as cars regarding capital allowances, benefits in kind, and certain deductions from business profits. However, those who purchase DCPUs before April 2025 will continue to benefit from the existing capital allowances treatment.
Keep up to date with the latest following the budget
Even though relatively few of the announcements are likely to have a direct impact on the tax affairs of self-employed people, it is still a good idea to stay informed of the outcome of the major Budget events.
You can read our complete reaction and analysis to the Autumn Budget using the links below:
.jpg)
Brian Gooch
I work extensively in the corporate owner managed business sector, covering transactional taxes, property taxes including Stamp Duty Land Tax and VAT, and all areas of business tax planning. I have considerable experience in maximising tax efficiency by reviewing business structures and planning corporate reorganisations.
View my articlesTags: Payroll, Business Taxes, Autumn Budget 2024
