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The Autumn Budget - What does it mean for you?

31 October 2024 • Sarah Medcraf


Sarah Medcraf, CE of Moray Chamber of Commerce said: “Scottish retail, leisure and hospitality businesses have missed out on Non-domestic rates relief for years as the Scottish Government have not replicated the relief given in England. We urge the Scottish Government to use the funding given through the Barnett formula to match the 40% relief announced in the budget to support these vital sectors.

The increase in employer NICs is a double blow for many businesses and this linked with rise in minimum wage, many will be revisiting their business plans to see if their current operations are viable. I fear we may see stagnant investment or even job losses with today’s rises.

Our whisky industry has not been supported in this budget and the short-sighted view on increasing the tax by an inflationary rate is ludicrous. As is introducing VAT on private school fees.

However, I am delighted to see that fuel duty has remained frozen and that there is to be no changes to the current R&D tax reliefs.

It is a relief that the Levelling Up and Long Term Town funds has been protected, this will enable Moray to regenerate as planned.”



Secondary Class 1 National Insurance Contributions (employer NICs)

The rate of employer NICs will increase from 13.8% to 15% from 6 April 2025. The Secondary Threshold is the point at which employers become liable to pay NICs on employees’ earnings, and is currently set at £9,100 a year. The government will reduce the Secondary Threshold to £5,000 a year from 6 April 2025 until 6 April 2028, and then increase it by Consumer Price Inflation thereafter. The Employment Allowance currently allows businesses with employer NICs bills of £100,000 or less in the previous tax year to deduct £5,000 from their employer NICs bill. The government will increase the Employment Allowance from £5,000 to £10,500, and remove the £100,000 threshold for eligibility, expanding this to all eligible employers with employer NICs bills from 6 April 2025.

Benefits in kind
The use of payroll software to report and pay tax on benefits in kind will become mandatory, in phases, from April 2026, applying to Income Tax and Class 1A NICs. Further detail is set out in a technical note.

Veterans’ relief

The government is extending the employer NICs relief for employers hiring qualifying veterans for a further year from 6 April 2025 until 5 April 2026. This means that businesses will continue to pay no employer NICs up to annual earnings of the Veterans Upper Secondary Threshold of £50,270 for the first year of a veteran’s employment in a civilian role.
Ownership Trusts and Employee Benefit Trusts
A package of reforms is being introduced to the taxation of Employee Ownership Trusts and Employee Benefit Trusts to prevent opportunities for abuse, ensuring that the regimes remain focused on encouraging employee ownership and rewarding employees. The changes will take effect from 30 October 2024. Further detail is set out in this policy paper.

Umbrella Companies

To tackle the significant levels of tax avoidance and fraud in the umbrella company market, the government will make recruitment agencies responsible for accounting for PAYE payments made to workers that are supplied via umbrella companies. Where there is no agency, this responsibility will fall to the end client business. This will take effect from 6 April 2026. Further detail is set out in this paper policy.

Vehicles

Following a Court of Appeal judgement, the government will treat double cab pick-up vehicles (DCPUs) with a payload of one tonne or more as cars for certain tax purposes. From 1 April 2025 for Corporation Tax, and 6 April 2025 for income tax, DCPUs will be treated as cars for the purposes of capital allowances, benefits in kind, and some deductions from business profits. The existing capital allowances treatment will apply to those who purchase DCPUs before April 2025. Transitional benefit in kind arrangements will apply for employers that have purchased, leased, or ordered a DCPU before 6 April 2025. They will be able to use the previous treatment, until the earlier of disposal, lease expiry, or 5 April 2029. Amended guidance clarifies this change of approach and how it is to be implemented, including transitional arrangements, for capital allowances (CA23510 and CA23511), benefits in kind (EIM23150 and EIM23151) and business profits (BIM47730 and BIM70035).

The government will also publish draft legislation relating to loopholes in car ownership arrangements, through which an employer or a third party sells a car to an employee, often via a loan with no repayment terms and negligible interest, then buys it back after a short period. This arrangement means those benefiting don’t pay company car tax which other employees pay, and so this measure will seek to level the playing field. The changes will take effect from 6 April 2026. HMRC will collaborate with stakeholders on draft legislation to ensure that legitimate schemes are not impacted ahead of the new rules being introduced in April 2026.

Company Car Tax (CCT) rates will increase by 2 percentage points (ppt) for zero-emission vehicles (ZEVs) and by 1ppt for all other vehicles for the 2028 to 2029 tax year up to a maximum appropriate percentage of 38%. CCT rates will increase by a further 2ppt for ZEVs and 1ppt for all other vehicles for 2029 to 2030 up to a maximum appropriate percentage of 39%. The rates for vehicles which produce 1-50g CO2 per kilometre, which are also capable of operating for 2028 to 2029 to 2029 to 2030, will be removed. Changes should be automatically reflected in tax codes for tax year beginning 6 April 2028.

Heavy goods vehicle (HGV) Vehicle Excise Duty rates will be uprated in line with the Retail Price Index (RPI) for 2025 to 2026 from 1 April 2025. The HGV Levy will also be uprated in line with RPI for 2025 to 2026 from 1 April 2025.


Further information

Information on all the Budget measures announced today, including the annual uprating of duties and rates, can be found in the Autumn Budget 2024 page on GOV‌‌‌.UK.

Tax-related documents, which include Tax Information and Impact Notes, consultations and calls for evidence can be found on GOV‌‌‌‌‌‌.UK. An overview of all the tax legislation and rates announced today has also been published.




Dr Liz Cameron CBE, Chief Executive of the Scottish Chambers of Commerce (SCC) said: “We welcome the additional £3.4 billion of funding for Scotland but as always the devil is in the detail, and we need to see a full breakdown of how this will be utilised to support economic growth.

“As we look ahead to the Scottish budget, we urge consequential funding to be utilised to support the business community, particularly on non-domestic rates and planning, to ensure a level playing field with the rest of the UK.”

On National Insurance Contributions, Dr Cameron said: “The increase in employer NICs and the reduction in the secondary threshold at which businesses have to pay it is a double tax hit for firms.

“Firms are bearing the lion’s share of plugging the £40 billion fiscal funding gap cited by the Chancellor, with the increase in employer NICs accounting for half of this. However, increasing the Employment Allowance from £5,000 to £10,000 will support Scotland’s micro and small businesses with less than ten employees and this is to be welcomed.

“Many businesses will be unable to absorb these costs and will have no alternative but to pass onto consumers. The scale of this additional cost will mean that pay rises and additional staff hiring could go on hold, or new jobs won’t be created.

“Staffing remains the most significant cost pressure for businesses and impacts recruitment, retention and training and as the Office for Budget Responsibility’s highlighted the majority of any rise in employers' NICs would be passed on to workers via lower pay rises.”

SCC welcomed the continuation of the freeze in fuel duty, Dr Cameron said: “The continuation of the freeze on fuel duty is a welcome boost during times of escalating costs and this is a positive measure at a time when cost pressures remain.”

On support for Scotland’s drinks industry, Dr Cameron said: “There is a cheer for the draught products industry today, but Scotland’s national drink loses out on support. We urge the Chancellor to re-think this decision and provide the whisky industry with essential support to enable future growth and further investment.”

On Capital Gains Tax, Dr Cameron said: “It is perhaps too early to see the impact of the increases to Capital Gains Tax but it is rarely a positive move given the competitive landscape we operate in. The substantial increase in the higher rate from 18% to 24% and a near doubling of the lower rate from 10% to 18% is likely to be difficult for many businesses to absorb.”

On Energy, Dr Cameron said: “The energy industry will welcome the commitment to 100% first year allowances for oil and gas investment, and confirmation of the initial funding of Great British Energy.

“However, it is disappointing that the Windfall Tax on the North-East economy and beyond has been extended. This is a sector where major investment decisions require confidence and certainty about the future and we call upon the government to work with industry to design a new tax approach that secures billions of investment and tax receipts, while protecting the jobs of tens of thousands of working people.”

Welcoming investment for hydrogen projects, Dr Cameron said: “Scotland is world-leading in alternate energies with hydrogen production at the forefront. Further support for the Cromarty Green Hydrogen and Whitelee Green Hydrogen projects is a major boost for international investment and supporting jobs in this growing sector.”

On the Argyll & Bute Growth Deal, Dr Cameron said: “This will be critical to help boost connectivity, infrastructure, and investment in the region. Local businesses will be looking for both governments to get round the table to sign off on the Growth Deal as soon as possible.”

SCC welcomes the Chancellor’s announcement of a clearer corporate road map for further business tax incentives, in particular the expansion of the eligibility of full expensing of leased and rented assets. Dr Cameron said: “It provides certainty and gives business the confidence to invest and grow. However, it needs to be balanced by the disappointing lack of help for businesses struggling with the high cost of VAT and the lack of movement on VAT free shopping for overseas tourists. We hope the Chancellor will work with business to consider this policy at a later stage.”

Dr Cameron welcomed £750,000 for the Scotland Office in 2025/26 to champion Brand Scotland: “We welcome the funding to boost Brand Scotland and urge the UK Government to expand this further. We would welcome further engagement with UK Government on working in partnership with business to promoting Brand Scotland across the globe.”

On Investment, Dr Cameron said: “We welcome the Chancellor’s approach to move away from short-term to long-term decision making which will enable the retention and attraction of investors to Scotland and the UK.

“Schemes like the Enterprise Investment Scheme (EIS) are rightly acknowledged as the global gold standard and have put the UK at the forefront as an incubator of innovative startup.

“Extending such schemes is vital for the founders and workers generating the growth that is important to the government’s goal of restoring public finances.”

On the extension of the Innovation Accelerator Programme in Glasgow, Dr Cameron said: “Glasgow’s notable achievement as one of the Top 20% most innovative cities globally, and its status as the second leading emerging tech destination in the UK, underscores the region’s potential. Extending the programme will build on these strengths, creating high-value jobs and advancing key sectors through collaborative innovation partnerships.”

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