The government’s Chancellor of the Exchequer, Jeremy Hunt, announced the Autumn Statement last week, laying out economic plans by the current government for the upcoming 2024 financial year. So what is changing?
National Minimum Wage change
The most important change that you should pay attention to from a healthcare standpoint, as an employer, is the increase in the National Minimum Wage from April 2024. Starting from 1st April 2024, the National Minimum Wage will go up to £11.44 per hour, and this rate will cover all workers who are 21 years old and over. It has also been revealed that 18–20-year-olds will earn a £1.11 hourly boost to £8.60.
It is important to remember the difference between the National Living Wage and the National Minimum Wage, as these differ with the ages of your employees and whether or not they are under an apprenticeship.
- National Living Wage, which historically was applicable to all employees over the age of 23, is now applicable to employees over the age of 21. This will be rising from £10.42 to £11.44, an increase of £1.02 per hour.
- National Minimum Wage, for all employees between the ages of 18-20, will be rising from £7.49 to £8.60, an increase of £1.11 per hour.
- National Minimum Wage, for all employees between the ages of 16-17, will be rising from £5.28 to £6.40, an increase of £1.12 per hour.
- The National Minimum Wage, for those undertaking an Apprenticeship, will be rising from £5.28 to £6.40, an increase of £1.12 per hour.
Although these changes are not in effect until next April, healthcare providers should start thinking about their long term pay strategy. It’s insufficient to just think about hourly paid employees, as the higher rates will also have an impact on salaried employees who are near the minimum. Once the increase is in place, the minimum annual income for a worker aged over 23 working for 37.5 hours per week will be more than £22,300, so it may be worth reviewing the salaries of other staff within your organisation to ensure they are still within the legal bounds of remuneration.
The ‘Full Expensing’ capital allowance
The Full Expensing capital allowance allows companies to deduct any spend on new equipment or machinery from their profits in one go, and is the equivalent of a 25% tax saving. This was originally announced in the 2023 Spring Budget and was set to run until 31st March 2026, but this latest Autumn Budget has announced that this will now be permanently implemented for businesses.
National Insurance
It was also announced that starting January 2024, there will be a reduction in the National Insurance rate paid by employees, decreasing from 12% to 10%. Additionally, the main rate of National Insurance for self-employed individuals is set to decrease from 9% to 8% beginning April 2024.