Autumn Budget 2024: The government is to increase the employment allowance from £5,000 to £10,500 and remove the £100,000 threshold from April 2025.
Chancellor of the Exchequer Rachel Reeves announced these measures in the Autumn Budget. The move will apply to all eligible employers, meaning 865,000 employers will pay no national insurance contributions (NICs) next year.
The move is intended to support small businesses with national insurance contribution (NIC)-related changes, which include the rate of employer NICs rising by 1.2 percentage points to 15%, and a reduction to the per-employee threshold from which employers are required to start to pay NI from £9,100 to £5,000 per year.
Mathew Akrigg, policy and research officer at the Chartered Institute of Payroll Professionals (CIPP), said: “It is positive for small businesses that the employment allowance will see an increase from £5,000 to £10,500. Small businesses make up the majority of employers in the UK, therefore, it is key to the government plan for growth to support such organisations.”
Paul Robbins, associate director of tax at Croner-I, added: “Better news for the employment allowance. This is a measure aimed at boosting recruitment by smaller businesses by reducing their employer’s NIC bill.”
