The UK Autumn Budget 2024 introduced several new developments for payroll and HR professionals to understand and work with. We sat down to unpack the key changes and their implications with Cybill Watkins, Product Legislation Manager, and Nick Clarke, Director of Product Management – Payroll & Portal.
Watch our Budget 2024 briefing with Cybill and Nick
National Insurance changes
One of the most notable changes is the 1.2 percentage-point increase in employer National Insurance contributions (NICs). From April 2025, employers will pay 15% instead of 13.8%.
The secondary threshold has been reduced from £9,100 to £5,000, with a new monthly threshold of £417. This means more employees will fall within the liability range.
At the same time, the government will remove the £100,000 eligibility threshold for Employment Allowance: simplifying and reforming employer NICs so that all eligible employers will benefit.
Employers not eligible for the Employment Allowance will need to factor this into budget forecasting for April.
“The chancellor continues to emphasise there isn’t a National Insurance tax increase for employees, but the increase for employers may have to be borne somehow. It remains to be seen whether there will be any knock-on effect on employees in a more indirect way: perhaps via recruitment as the costs of employing people rise.”
Nick Clarke, Director of Product Management – Payroll & Portal
National Living Wage and Minimum Wage increases
In April 2025, the National Living Wage will rise by 77p, from £11.44 to £12.21 per hour – an increase of nearly 7%. The Minimum Wage for 18-20 year olds will see an even bigger 16% jump, from £8.60 to £10.00 per hour.
Employers should carefully review remuneration, work schedules, and earnings, and make necessary adjustments to avoid NMW breaches. It may also mean some employees become more hesitant about joining salary sacrifice schemes.”
While the budget speech itself was silent on pensions and benefits-in-kind, a policy paper later revealed that the mandating of payrolling benefits will go ahead from 2026.
One of the questions we’ve been asking is about loans and accommodation. We’re told that these will be voluntary to payroll, and will be mandated as part of future legislation, but there’s no firm timeline as yet.”
The budget has maintained the benefit-in-kind rates for electric vehicles (EVs) but increased the rates for plug-in hybrid electric vehicles (PHEVs) from 2028/29.
Company Car Tax (CCT) rates will increase by 2 percentage points for zero-emission vehicles and by 1 percentage point for all other vehicles.
The gap between EV company cars and other cars will increase, so this will be something for employers to keep an eye on.
HMRC and compliance
The budget has recommitted to investing in HMRC’s systems and increasing compliance staff. This investment aims to generate more income and address tax avoidance schemes.
Nick Clarke expressed his hopes for HMRC’s digital services:
It would be great if employers could see in more granular detail what the realtime information [RTI] submissions look like at an employee level.”
Nick Clarke, Director of Product Management – Payroll & Portal
Other notable changes
The earnings cap for Carers Allowance is rising to over £10,000 a year.
The threshold for employees’ income tax and NI will stay frozen until 2028.
Fuel duty is frozen until next year, with the existing 5p cut extended for another year.
Corporation tax cap is fixed at 25%.
Employer NICs relief for hiring qualifying veterans is extended for a further year.
Double cab pick-up vehicles (DCPUs) will be treated as cars for certain tax purposes from April 2025.
Payroll and HR to lead as employers navigate Budget 2024 and other changes
As we’ve seen the UK Autumn Budget 2024 introduces several significant changes. Payroll and HR professionals will play a leading role in helping their organisations navigate the adjustments successfully.
Nick Clarke also mentioned the government’s landmark Employment Rights Bill, which similarly promises a major impact on policy and practice.
It covers both payroll and HR issues, including equal pay, flexible working sick leave, bullying, parental leave, redundancy, and unfair dismissal.
As Cybill concludes, legislators are inviting employers to provide input and help shape the bill as it progresses through Parliament:
There is a call for evidence on the Employment Rights Bill that gives the opportunity to give evidence via written documentation in relation to this bill. This is a great opportunity to share the employer and business perspective, to help ensure changes take into account the views of organisations and the practicalities of payroll implementation.”
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