Now the Dust Has Settled on the October 2024 Budget: What Does It All Mean for Your Business?

Now that the dust has settled on the October Budget, many businesses are looking closely at what these economic reforms actually mean for them day to day. With new changes on National Insurance, wage increases, and targeted reliefs, the budget brings both opportunities and challenges that could shape your recruitment and operational plans for years to come.

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Supporting Your Needs Through Economic Change

Chancellor Rachel Reeves’ recent budget is about building a stronger future, with promises to put “more pounds in people’s pockets” and revive economic stability across the UK. It’s a significant shift, aiming to balance growth with sustainability. But what does it mean for your business?

Here’s a breakdown of what to expect and how HRGO Recruitment can support you as you navigate these changes.

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1. Upcoming Changes to National Insurance (NI) for Employers

Overview: Starting in April 2025, employers’ NI contributions will increase from 13.8% to 15%, with the threshold for paying these contributions reducing from ￡9,100 to ￡5,000.

Impact for SMEs: This will likely add pressure to staffing budgets, particularly for smaller businesses, and could lead to rethinking hiring plans to manage these extra costs.

HRGO’s Perspective: Maximising the productivity of your current team and boosting employee retention can help reduce recruitment costs. We’re here to support you with recruitment strategies tailored to meet your needs.

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2. Adjustments to Income Tax and NI Thresholds

Overview: From 2028-29, personal tax thresholds will align with inflation to prevent “bracket creep,” where employees are pulled into higher tax rates simply due to inflation.

Considerations for Employers: Although this change is a few years away, it may affect employee take-home pay and potentially influence wage expectations down the line.

HRGO’s Perspective: Addressing these changes in advance can strengthen morale and retention. We can work with you to help manage wage expectations and prepare for potential cost-of-living adjustments.

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3. Increase in National Living Wage and Minimum Wage

Overview: The national living wage will increase by 6.7%, raising the hourly rate for those aged 21 and over from ￡11.44 to ￡12.21 starting next April. Here’s a breakdown of how the minimum wage (NMW) will increase across other age groups:

Impact on Wage Budgets: For SMEs, especially those in staffing-heavy industries, this increase could require a closer look at payroll budgets.

HRGO’s Perspective: While these increases can boost morale and attract talent, they may require adjustments elsewhere in your budget. We can help you find staffing strategies to maintain cost-efficiency while meeting new wage requirements.

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4. Expanded Business Rate Relief and Increased Employment Allowance

Overview: Retail, hospitality, and leisure businesses will see permanently reduced business rates from 2026-27, along with an increase in employment allowance from ￡5,000 to ￡10,500.

How This Can Help SMEs: This extra support could be a valuable cushion, enabling businesses to free up funds for growth or recruitment.

HRGO’s Perspective: These allowances offer a chance to reinvest in people and growth. We can support your recruitment efforts, ensuring you’re well-positioned to make the most of these benefits.

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5. Sector-Specific Tax Hikes and Potential Cost Pressures

Overview: Carried interest taxes will rise, and an increase in oil profits tax could indirectly affect energy costs, leading to higher operational expenses for some.

Impact on Operating Costs: Energy prices may rise, which can have a knock-on effect on your expenses.

HRGO’s Perspective: Finding cost efficiencies, including flexible staffing options, could be key to keeping your business running smoothly despite these changes. We’re here to support your cost management efforts.

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Let HRGO Recruitment Support Your Growth

As you navigate these changes, HRGO Recruitment is here to support you with flexible, cost-effective staffing solutions. Let’s work together to make these shifts an opportunity for growth. Reach out to us anytime – we’re here to help.