Last Updated on 01/11/2024 by Sarah Sarsby
On 30 October 2024, Chancellor of the Exchequer Rachel Reeves delivered the Labour Party’s Autumn Budget to Parliament, detailing the UK Government’s tax and spending plans for the year ahead.
The topline announcements that will impact British Healthcare Trades Association (BHTA) members have been highlighted below.
Rachel Reeves announced that there will be no increase to National Insurance, VAT, or Income Tax for employees. Income Tax and National Insurance Contributions (NICs) thresholds will be unfrozen from 2028-29 onwards, which means that people will not be moved into higher tax brackets until then.
However, from 6 April 2025, the government is increasing the rate of employer NICs from 13.8 percent to 15 percent. In addition, the threshold at which businesses start paying National Insurance on a worker’s earnings will be lowered from £9,100 to £5,000.
The smallest businesses will be protected from this change, as the Employment Allowance will increase to £10,500 from £5,000 and be extended to all eligible employers by removing the £100,000 cap. The UK Government says that this means that 865,000 employers will pay no NICs next year.
The Autumn Budget 2024 also revealed that the National Minimum Wage will be increased by 6.7 percent, from £11.44 an hour to £12.21 hour, for people aged 21 and over. The National Minimum Wage will rise for people aged between 18 and 20-years old from £8.60 to £10.
Additionally, the weekly earnings limit for Carer’s Allowance will be increased to 16 hours at the National Living Wage, worth an additional £45 a week from April next year.
One of Labour’s seven key pillars for growth is to drive innovation with increased funding of STEM industries.
The chancellor also announced that Labour is setting a two percent productivity, efficiency, and savings target for 2025/26 for every government department.
Off the back of Lord Darzi’s independent review of the NHS, a 10-year plan for the NHS is due to be published by the government in spring 2025. This plan will set out reforms to transform the NHS from analogue to digital and more from model of sickness to prevention shift care from hospital to community.
In the budget statement, the chancellor confirmed an additional £22.6 billion for day-to-day spending over two years for the Department of Health and Social Care (DHSC), supporting Labour’s goal for the NHS to deliver an extra 40,000 elective appointments per week.
The settlement also confirms capital spending for DHSC will increase by £3.1 billion in 2025‑26 compared to 2023-24 outturn, rising to £13.6 billion, representing record levels of capital investment into health and a two-year average real terms growth rate of 10.9 percent.
Further investments into the NHS included £1 billion for a special fund to address physical infrastructure plus £1.5 billion for new diagnostic centres.
Additionally, Rachel Reeves announced £600 million of new grant funding to support social care. This is alongside an £86 million increase to the Disabled Facilities Grant (DFG).
Responding to the Autumn Budget 2024, David Stockdale, Chief Executive of the BHTA, said: “While we fully welcome additional funding for the NHS and local authorities, we are deeply concerned about the impact of rising costs on the private sector.
“Many of our members are small and medium enterprises, tied to fixed-price contracts with NHS suppliers and local authorities, and rising business costs could make them completely unsustainable.
“Taking on increased National Insurance and the Minimum Wage will be particularly costly without support. In fact, we are already hearing that without support this could ‘decimate’ vital sectors, like community equipment.
“Tax increases and other escalating business expenses threaten to offset any additional investment being made by the government. The hundreds of SMEs that we represent will bear the brunt if this budget despite the fact that we supply the NHS with the essential tech and products necessary to deliver timely, effective care. We stand ready and willing to work with the Government to ensure that this investment is not eroded by increased tax burdens on businesses.”