2024 Autumn Budget – What does it mean for Butchers?

Yesterdays budget whilst not a surprise for any of us was disappointing and the changes due next year will have impacts on all our members. There were some small positives with the NI Employment allowance increasing and corporation tax held.

However, there were some damaging decisions at complete odds with the Government’s commitment to growth. Despite pleas from across the independent retail sector to maintain the 75% small business rate relief (while a review of the business rate system was conducted) we now have a reduction of that relief from 75% to 40%. For some this sees their business rates nearly double, while also facing increased costs in minimum wage, national insurance and all other areas of their business.

NCB Legislation Director John Mettrick said “Butchers, who face extremely tight margins within their business and have already endured years of challenging trading conditions, now face further challenges and cost increases. Some business will be unable to remain profitable under these circumstances and may be forced to close.”

Some of the key points for butchers are:

Minimum Wage

• National living wage (the legal minimum for over-21s) will increase to £12.21 (6.7%) equivalent to £1,400 a year for an eligible full-time worker.
• For 18 to 20-year-olds, the minimum wage will rise from £8.60 to £10.
• There will be a single-adult rate phased in over time to eventually equalise pay for under-21s.

National Insurance

• Employers’ national insurance contributions rise by 1.2 percentage points to 15% from April 2025.
• The secondary threshold when contributions are due reduces from £9,100 to £5,000.
• However, the employment allowance will increase from £5,000 to £10,000 which does provide some shielding for the smallest businesses.

Capital Gains & Inheritance Tax

• Capital gains tax will be increased. The lower rate will be raised from 10% to 18%, and the higher rate from 20% to 24%.
• The government will extend a freeze on the threshold for inheritance tax to 2030, allowing £325,000 to be inherited tax free. From 2027 inherited pension pots will also be subject to the tax.
• Reliefs will be reformed for business and agricultural assets. After £1m, those assets will attract inheritance tax of 20%.

Corporation Tax

• In line with prior confirmations from the Government, the main rate of corporation tax will be capped at 25% for the duration of this Parliament.
• The small profits rate (at 19%) will be maintained as will the current thresholds for marginal relief

Business Rates Relief

• An intention to introduce permanently lower multipliers for retail, hospitality and leisure (RHL) properties with a rateable value (RV) under £500,000 from April 2026-27.
• An intention to fund this sustainably via a higher multiplier on properties with RV of 500,000 and above, which includes the majority of large distribution warehouses including those used by online giants.
• Providing support for retail, hospitality and leisure properties in the interim period leading up to the new permanent multiplier by providing 40% relief to RHL businesses on their business rates in 2025-26, up to a cash cap of £110,000 per business.
• Protecting the smallest properties by freezing the small business multiplier in 2025-26 and protecting over a million properties from inflationary bill increases.

Full details of the budget can be found here – https://www.gov.uk/government/publications/autumn-budget-2024/autumn-budget-2024-html