Yesterday the Chancellor Rachel Reeves delivered the first Labour Budget for over 14 years.
Here are some of the key points for small businesses:
From April 2025, Employers' National Insurance contributions will increase by 1.2 percentage points to 15%. The secondary threshold, the point at which employers start paying National Insurance on a worker's salary, will be cut from £9,100 a year to £5,000.
However, in a move designed to protect the smallest employers from the National Insurance rise, the Employment Allowance will increase from £5,000 to £10,500 which the Chancellor says means 865,000 small businesses won't pay National Insurance.
From April 2025, the minimum wage for employees aged 21 and over will increase by 6.7% to £12.21 an hour, equivalent to £1,400 a year for a full-time worker. Minimum wage for workers aged 18 to 20 will rise by 16.3% to £10 an hour.
Elsewhere, around £1bn will be provided to the British Business Bank in 2024-25 and 2025-26 to ‘enhance access to finance for small businesses’.
Finally, the Government said it will publish a Small Business Strategy Command Paper next year, setting out their vision for support for small businesses.
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