UK: Autumn Budget

Authors: Corinna Harris, Ruth Bonino, and Sophie Jackson 

We will explain the key points for employers to note from the Autumn Budget.

The key points to note for employers arising from this year’s Autumn Budget announced this month by the new Labour government are:

• Employer NICs: Employer national insurance contributions (NICs), which are the mandatory contributions an employer is required to pay for each of their employees by reference to their individual earnings, are set to rise from 13.8% to 15% of employee earnings from 6 April 2025. From the same date, the threshold at which employers start paying employer NICs on a worker’s earnings will be lowered from £9,100 per year to £5,000 per year.
• National Minimum Wage: Before the Budget, the government also announced increases to the National Minimum Wage. The rates include an increase to the rate for 18 to 20 year olds which narrows the gap between that rate and the National Living Wage (NLW) which currently applies to those aged 21 and over. The plan is that the NLW will in future apply to everyone aged 18 and over. The new rates, which apply from 1 April 2025, will be:
  • £12.21 per hour for workers aged 21 and over (up from £11.44 per hour)
  • £10 per hour for 18 to 20 year olds (up from £8.60 per hour), and
  • £7.55 per hour for 16 to 17 year olds and apprentices (up from £6.40 per hour).
• Umbrella companies: the government has announced that it will legislate to transfer PAY responsibility from umbrella companies to agencies and end-clients. The measure is expected to take effect from 6 April 2026

Key Action Points for Human Resources and In-House Counsel

These changes will take effect from April 2025.  As regards the umbrella companies, employers should look out for a public consultation containing the detailed proposals together with draft legislation as well as technical guidance.