How Budget 2024 will affect UK employers

 

What is the impact of the 2024 Budget on UK employers? 

As an HR consultancy we wanted to share our thoughts on this budget as so many people have been asking for advice.  

We have summerised here and do call us if you need help to understand the implications and changes for your business. 

Plain Talking HR is always on hand to offer advice and remember we offer packages to help you keep on top of your HR and the changes made, so you are always compliant.  

 

 

The 2024 Labour Government Budget has introduced a range of changes set to impact employers across the UK. From revised tax policies to adjustments in workforce support and employment incentives, these changes aim to create a more balanced economic environment, particularly benefiting smaller businesses and industries focused on sustainable growth.  

 

Here’s an overview of what employers should know and how these updates may affect hiring practices, payroll, employee benefits, and overall operational planning. 

 

1. Increased Minimum Wage and Living Wage Rates 

 

The legal minimum wage for over-21s, will increase by 6.7% to £12.21 

 

From April 2025 the hourly rate for the National Living Wage will rise from £11.44 to £12.21.  

 

The National Minimum Wage (NMW) for 18 to 20 year-olds will also rise from £8.60 to £10.00 an hour, 

 

 

Increase in the national insurance (NI) rate paid by employers, from 13.8 per cent to 15 per cent by April 2025.  

The main threshold above which employer NICs is paid for an employee – the secondary threshold – will be reduced from £9,100 a year to £5,000 a 

year.  

Employment Allowance will be increased from £5,000 to £10,500. 

Employment Allowance allows employers to reduce the total amount of National Insurance they pay per year. 

At present, Employment Allowance is only available to employers who have less than £100,000 in National Insurance liabilities. This restriction 

will be removed so larger employers will also be eligible. 

 

 

 

Recognising the importance of youth employment, the Budget introduces more funding for apprenticeships and entry-level roles. Employers hiring young people or offering apprenticeships in key sectors can expect increased government support. More information to be released on this. m 

 

 

 

Labour’s Budget included the plan for expanded resources for mental health support in the workplace, encouraging employers to prioritise mental well-being and make mental health resources more accessible to their teams. The government has committed an additional £26 million to open new mental health crisis centres, reducing pressure on A&E services, and to tackling the root causes of mental health problems and supporting people to remain in, return to and find work.  

 

 

 

The 2024 Budget introduces significant changes for employers, many of which will require proactive planning. Here are some actions employers should consider: 

 

With minimum wage increases, budget adjustments will be necessary, especially for businesses with a large base of minimum-wage employees. 

 

2. Leverage Training Incentives 

Employers should explore new training programs that align with government priorities to take full advantage of tax credits and upskilling opportunities. 

 

3. Evaluate Flexible Working Policies 

Consider revisiting flexible work policies and offering greater support for employees with family commitments. 

 

Start building or expanding your green initiatives to meet new sustainability requirements, especially if your organisation falls under the category of large employers. 

 

Keeping abreast of government updates will help your business stay compliant and make the most of available incentives. 

 

You can read the full budget for 2024 here  

Feel free to reach out if you need further assistance navigating these changes, or if you’d like help updating your HR policies to align with the new government initiatives!