Autumn Budget 2024: Reeves raids contractor take-home pay

Autumn Budget 2024 has eight main areas affecting UK contractors.

As reported yesterday and below (‘Umbrella Regulation’), the biggest of the eight will see PAYE responsibility shift from umbrella companies to recruitment agencies.

The seven remaining areas -- demystified below, first by ContractorUK’s partners and then by other contracting experts, are:

1. Employer NICs increase for umbrella company contractors.

2. Employer NICs increase for limited company directors.

3. Increase in BADR/CGT rates in April 2025 and April 2026.

4. Contractor personal financial planning.

5. Contractor mortgages.

6. Loan Charge Review.

7. Double Cab Picks-Ups (and other small but significant tax changes).

1. Employer NICs increase for umbrella company contractors

For employees working via an umbrella company, the chancellor’s increase in ‘ERNICs’ will be felt directly in their gross pay, says Samantha Brown, a director at SG Umbrella.

Brown was referring to Rachel Reeves saying yesterday that Employer National Insurance will rise by 1.2% from 13.8% to 15%.

‘Impact’

But it’s not the only change to Employer NI from April 6th 2025.

Reeves also said the secondary NI threshold is to be reduced from £9,100 to £5,000.

And “this will also have an [adverse] impact.”

‘Less gross income for carrying out the same work’

Speaking yesterday to ContractorUK from SG Umbrella’s office in Wimborne, Dorset, Ms Brown expanded on her assessment:

“The [secondary NI threshold reducing will hurt brolly staff] because employment costs are deducted from their agreed assignment rate.

“So [umbrella users] will be left with less gross income than they had previously -- for carrying out the same work.

“Unless they can agree an assignment rate uplift, this ERNICs hike will be passed on to staff, in full, resulting in lower take-home pay.”

For further insight see the below section, “Overview of Employer NICs increase for umbrella company contractors.”

2. Employer NICs increase for limited company directors

Higher employer NI is a “significant” development ‘both for our clients and ourselves as an employer,’ acknowledges Jon-Marc Spatcher, managing director of SG Accounting.

For contractors operating as limited companies, the accountancy boss calculates four key impacts of higher Employer National Insurance, some positive -- some negative:

i) Overall cost increase for employers

Employers will face higher expenses, potentially leading to tighter budgets and reduced spending in other areas.  

ii) Increased demand for highly skilled contractors 

When hirers opt for contractors, rather than employees, there’s no ongoing salary commitment once a project ends; no pension contributions to fund, and no Employer NI. 

In line with comments yesterday by Qdos, these costs not arising on contract hires appear to shine a favourable light on such freelance professionals.

iii) Pressure on contractor rates

Spatcher fears contractors might come under “pressure to lower their rates” to offset employers' higher NI contributions.

While ERNICs isn’t payable to HMRC when hiring contractors, it is on employees, and contractors could get squeezed by the engager, in turn, “potentially decreasing their overall earnings,” he warns. 

iv) Impact on contracting market

Increased NI costs could make the market more competitive, “prompting contractors to enhance their skills and value propositions,” said Spatcher, a certified IT project manager.

For further insight see the below section, “Guidance on Employer NICs increase for limited company contractors.”

3. Increase in BADR/CGT rates in April 2025 and April 2026

Pre-Budget, there was concern that the rate of Business Asset Disposal Relief could “substantially increase” from the current low rate of 10%, says SFP Group.

Voiced by accountants and contractors, that concern was that Members' Voluntary Liquidations (MVLs) might become “uneconomic” to undertake.

“However, we are pleased to note that the anticipated increase [announced by the chancellor] is relatively minor, rising to 14% in April 2025 and 18% in April 2026,” says Daniel Plant of SFP Group.

‘Window for contractors’

An expert on MVLs, Mr Plant, SFP’s boss further told ContractorUK: “This announcement means that there is a window for contractors to take advantage of the current 10% rate -- before April 6th 2025.

“But contractors will still be able to use MVLs for their companies in the future as a means of extracting assets in a tax-efficient manner -- albeit at a slightly higher rate.”

For further details see the below section, “More on BADR/ CGT rate increase in April 2025 and April 2026.”

4. Contractor personal financial planning

Autumn Budget 2024’s key takeaways for contractor personal financial planning should start with the positives -- and that’s what didn’t change, says Yolo Wealth.

The financial advisory observes Autumn Budget 2024 didn’t alter dividend taxation, employee national insurance, or the freeze in the tax-free personal allowance (there was a fear it would be extended to 2029).

‘Positive changes’

Yolo Wealth’s Angela James also pointed out to ContractorUK that Reeves capped corporation tax at 25%, and vowed to maintain the Small Profits Rate.

“From this perspective, yes, there were no changes in a more favourable direction,” she acknowledges.

“But amid the chancellor warning yesterday of the need to fill a £22billion back hole, it’s got to be good that the government isn’t increasing or further extending the impact of these taxes/thresholds.”

‘Death benefits landscape for pensions needs the blanks filling in’

As to what the chancellor changed, James called the Employer’s NI rise “bad news” for both limited and umbrella company take-home.

“Another significant [but unwelcome] shift will be to the death-benefits landscape for pensions,” adds Yolo Wealth’s founder.

“More information needs to be established to fully understand this change, and we can provide affected contractors with more information as this becomes available.”

‘Children or other beneficiaries to suffer IHT on passed pensions’

For now, James says she deduces that “you will still be able to pass [your pension] to your spouse on death tax-free, but after that, children or other beneficiaries are going to now suffer inheritance tax to cover for this legacy.”

“This is not ideal news,” she says. “And it may mean some changes are needed as to how we plan our legacies we leave behind.”

For further insight see the below section, “Autumn Budget key measures affecting contractor personal financial planning.”

5. Contractor mortgages

There were very few surprises relating to the contractor mortgage market -- specifically housing, in Rachel Reeves’ first budget, says Freelancer Financials.

‘Non-surprises’

In particular, there were three Autumn Budget non-surprises on housing, the mortgage broker says:

i) BUILD

Five billion pounds is being allocated to deliver a housing plan which, broadly, is a pledge of 1.5m homes over the course of the parliament.

In addition to £3.1bn being promised to build affordable homes, a further £3bn will be spent supporting small housebuilders.

Comprising the investments for affordable housing, the UK will see ‘Right To Buy’ discounts lowered for social tenants, and councils will keep the full purchase price of social homes.

In addition, the Labour manifesto-pledged funding for 2,000 new homes in Liverpool docks will be forthcoming, plus further investment in Cambridge.

ii) STAMP DUTY

An increase to SDLT on second homes of 2%, effective from today (October 31st 2024), will go towards supporting first-time buyers and home-movers.

However, there was no commitment from the chancellor to extend the current Stamp Duty freeze for first-time-buyers, observed Freelancer Financials’s John Yerou, “so they will need all the support they can get when their rates return to normal.”

iii) AS YOU WERE FIRST-TIME BUYERS

Freelancer Financials’ CEO, Mr Yerou says the mortgage industry was hopeful for the return of initiatives like ‘Help To Buy,’ to make homeownership “more attainable” for first-time buyers but, he regrets, “it wasn’t to be.”

Freelancer Financials will provide a full update on the contractor mortgage space in wake of Autumn Budget 2024, given that the ‘devil is always in the detail’ at chancellors’ fiscal statements.

The analysis by Mr Yerou will follow -- exclusively on ContractorUK.

For further details see the below section, “Other Autumn Budget announcements relating to contractor mortgages.”

6. Loan Charge Review

Steve Packham, co-founder of the Loan Charge Action Group says it is “hugely positive” that Autumn Budget 2024 pledges to commission a “fresh, independent review” of the Loan Charge.

‘Actually listening’

LCAG’s Mr Packham told ContractorUK last night:

“We thank [chancellor] Rachel Reeves and [the exchequer secretary] James Murray for this, and for actually listening to those whose lives have and are being ruined by the loan charge scandal.  

“This fresh review must be genuinely independent and this time must look at the whole issue, the role of IR35 legislation, the entire contractor supply chain and the misconduct and failures of HMRC.

“There must now be a pause in related HMRC activity, to allow for the review to be established and to then properly examine the whole scandal, leading to a fair and final resolution for the thousands of families affected.”

‘Bring the matter of the loan charge to a close’

Packham was referring to Autumn Budget chapter 5.64.

It pledges to commission a Loan Charge review to “bring the matter to a close for those affected whilst ensuring fairness for all taxpayers.”

‘Murray to set out further details’

No documents were published alongside the Budget to illuminate the pledge (which was not part of Labour’s manifesto but which Reeves reportedly made).

However, HM Treasury yesterday said that “further details” about the Loan Charge review “will be set out” by Mr Murray “in due course.”

7. Double Cab Pick-Ups (and other smaller but significant tax changes)

An Autumn Budget announcement that “sneaked into” the full report (whereas it wasn’t in the chancellor’s full speech) is to tax DCPUs as cars, says PSTAX director Angela Ferguson.

“The government is ploughing ahead with previous changes announced and then repealed, for Double Cab Pick-Ups,” Ferguson points out.

‘Outcry’

“You may remember this being announced and repealed earlier this year, after an outcry from the agricultural and motor industry.”

SG Accounting’s Dan Mepham has already advised ContractorUK readers about the stalled tax-change to DCPUs, which stems from a Court of Appeal judgment.

The tax change will now apply from the new tax year (2025-26).

‘DCPUs to be tax-treated more as cars’

Autumn Budget chapter 5.91 states: “The government will treat double cab pick-up vehicles (DCPUs) with a payload of one tonne or more as cars for certain tax purposes.

“From 1st April 2025 for corporation tax, and 6th April 2025 for income tax, DCPUs will be treated as cars for the purposes of capital allowances, benefits in kind, and some deductions from business profits.”

HMRC to charge higher late payment interest on tax debts

Another of Autumn Budget’s “buried points” is the government increasing the late payment interest rate charged by HMRC on unpaid tax liabilities, says Shoosmiths tax partner Kate Garcia.

“Applying this [1.5 percentage points increase] to today’s base rate would make the late payment rate 9%,” balked Garcia.

‘Punitive’

The tax partner added in a post: “My view is that since HMRC can already levy penalties on late payment, late returns and inaccuracies, it is wrong to make interest punitive, especially when there is no opportunity for mitigation.

“It is noteworthy that the repayment rate [is] set 5% lower, so HMRC is not incentivised to speed up repayments to taxpayers, perpetuating the mismatch in standards expected of taxpayers versus HMRC.”

HMRC modernisation (doesn’t include Single Worker Status)

Chancellor Reeves vowed yesterday to modernise HMRC to help it “deliver the most ambitious ever package of measures to close the tax gap,” to raise £6.5bn in extra revenue in 2029-30.

“Investing in HMRC systems and more compliance officers is positive,” Bauer & Cottrell director Charlie Hemsworth told ContractorUK.

“But modernisation must also focus on fairness for the taxpayer, particularly in the enforcement of IR35, where consistency and transparency have long been lacking.

“And there was nothing in Autumn Budget 2024 on Labour’s promised move towards Single Worker Status. So don’t expect that to be enacted anytime soon.”

Umbrella Regulation

Autumn Budget’s biggest measure for contractors is the timetable for umbrella company regulation, which is both new and far-reaching.

‘PAYE responsibility shift’

RSM’s employment tax partner Susan Ball put it best.

“From April 2026, legislation will shift PAYE responsibility from umbrella companies to recruitment agencies in labour supply chains,” she said.

“But if no agency is involved, the end client will be responsible instead.”

ReLegal Consulting’s Rebecca Seeley Harris summed it up well too.

She says umbrellas’ current PAYE responsibility is to be transferred to the recruitment agency, or end-client if the contractor is direct-to-client, from April 6th 2026.

‘Making sure correct tax is paid’

Formerly seconded by HM Treasury, and now a tax lawyer, Seeley Harris explained the aim.

“The objective is that the labour supply chain becomes responsible for making sure that the correct amount of PAYE is paid.

“The umbrella company can still run the PAYE but, the end-client or the agency will be liable if they default.”

‘More important than ever’

The lawyer says in protracted cases like PPS Umbrella (which HMRC has been pursuing for £7.2m in unpaid NICs), the tax debt would transfer.

 “As I have been saying [for a while now], labour supply chain compliance is now more important than ever,” Seeley Harris said.

In agreement on that importance is SafeRec’s Sebastien Sauca, but now agencies actually need to act on it.

‘Requires agencies to reconsider’

“The government's commitment to legislate changes regarding responsibility for Pay As You Earn when an umbrella company is involved, will require agencies to reconsider their approach to compliance when it comes to umbrella companies,” Mr Sauca, SafeRec’s CEO told ContractorUK.

“While it’s challenging to envision how agencies might take on payroll operations or employer responsibilities, ensuring that taxes are correctly calculated and paid to HMRC has now become a mandatory compliance issue for recruitment agencies.”

‘Option 3’

But the government is forging ahead with, in effect, a reject.

In fact, making the agency the deemed employer of an umbrella contractor was tabled by the prior Tory government as ‘Option 3’ in an umbrella regulation consultation.

But it never got off the ground.

Labour now going forward with an old Tory government idea (which in addition got rejected) is maybe why not everyone is convinced.

‘Flattered’

“There’s not enough clarity in yesterday’s ‘Tackling non-compliance in the umbrella company market’ document,” believes Clarity Umbrella’s Lucy Smith.

“I guess we should be flattered that at last umbrella companies were mentioned directly in the chancellor’s speech.

“And it is good to see that actions are being taken finally to stamp out non-compliance in the industry.

“However the outline in ‘Tackling…’ is a little contradictory, one part suggests that, even though in both cases the recruiters will be liable for PAYE, where precisely the deductions occur seems to be a mystery.”

‘PAYE will be operated by the umbrella company’

Smith was referring to the government saying on the one hand: “Where an agency chooses to outsource the operation of payroll to the umbrella company that employs the worker they are supplying, PAYE will be operated by the umbrella company on behalf of the agency and the agency will be liable for any shortfall.”

But then saying, seemingly on the other hand (in the same document):

“Agencies operating PAYE will withhold income tax and NICs before making payments to the umbrella company employing the worker, or any other intermediary between them and the umbrella company, remitting these sums to HMRC and preventing umbrella companies from failing to pass sums that should be withheld from workers’ pay to HMRC.

“Agencies will also be responsible for the payment of employer NICs.”

‘Technical guidance’

The key point appears to be ReLegal Consulting’s -- specifically; that the brolly can still run the PAYE but, the end-client or the agency will be liable should the brolly default.

Nonetheless, Smith will hope incoming “technical guidance” from HMRC on the operation of the change will put the particulars beyond doubt.

‘Online tool to help umbrella workers and recruitment agencies’

Autumn Budget suggests a CEST-type tool will also be released:

“The government will shortly publish an online tool to help workers and agencies understand pay from umbrella companies, as well as further guidance,” the government says.

“This will also help businesses with the implementation of the measure.”

‘Light on detail’

These “next steps” (as HMT called them yesterday) should reassure law firm Chartergates, which criticised ‘Tackling…’ as “light on detail”.

But Stuart Marquis of Workwell says what’s clear is that the writing is on the wall for the underhanded and worse of the brolly market.

‘Agencies, how confident are you in your PSL?’

“Recruitment agencies; this is what lies on your fast-approaching horizon,” Marquis began in a social media post.

“Chances are you are already exerting some form of control over what umbrella companies find their way into your supply chains when you place contractors with your clients.

“But just how confident are you in your Preferred Supplier List compliance framework?

“[The government moving at Autumn Budget to bring] agencies into the scope of liability isn’t really surprising.

“And this sort of supply chain self-policing is in sync with wider changes that we've seen over recent years.”

‘HMRC, the sheriff, deputising agencies as its deputy’

A manager at Workwell (formerly JSA), Marquis asked his agency followers: “Why would HMRC [as the] ‘sheriff’ do all the work, when it’s easier to make you his deputy?!”

Alan Lowdell, a former finance manager at contractor recruitment agency Gattaca, suggests a switching of roles is to oversimplify it.

‘Challenging’

“This is a huge announcement. Umbrella companies will no longer be legally responsible for operating PAYE on payments to the workers that they employ,” Lowdell began in a statement to ContractorUK.

“But my view is that for some workers, this will prove to be very challenging, particularly those who hold multiple assignments, or move from agency to agency meaning they will no longer have continuity of employment.

“For some agencies who do not operate their own PAYE payroll, this will also be challenging.

“They may not have the expertise to operate it, but they [will soon] take responsibility for the debt! It is proposed to be effective from April 2026 and I guess the devil will be in the detail of the legislation, which I doubt we will see for a while.”

‘Huge step forward for contractors’

A lobbyist against umbrellas pocketing holiday pay, Contractor Voice, confirms that it’s difficult to underestimate the significance of Labour’s regulatory action plan.

“This is a huge step forward for contractors who have been subject to unscrupulous umbrella companies paying below NMW or skimming from their pay,” the lobbyist’s Jacob Bellas told ContractorUK.

‘Agencies will likely no longer rely on processes that they until now trusted’

“Contractor Voice has been committed to exposing these practices.

“And the government has publicly recognised that the membership bodies are not doing enough to tackle non-compliance, as it is now introducing legislation that will result in the agency or end-client being responsible for unpaid taxes.

“Agencies that have relied on the work of membership bodies previously, will likely no longer rely on the 'trust' of their processes.

“And, now that the PAYE liability remains with the agency, [they will surely] insist on independent auditing of contractors' pay to ensure that they are not left to pick up the pieces -- something that previously resulted in an expense to the contractors who were victims of the non-compliant models.”

‘Accreditation badge’

SafeRec’s Mr Sauca sees it similarly.

“Relying solely on an accreditation badge is no longer sufficient for agencies,” he argued.

“They will need robust assurances that taxes have been accurately calculated.”

Overview of Employer NICs increase for umbrella company contractors

When the chancellor stated in her speech, “Labour’s tax rises will not hit workers’ payslips,” she didn’t factor in all agency and umbrella workers, says SafeRec.

‘Up to 15% tax increase for some working people-run businesses’

John Bounds, a director at umbrella company RocketPaye echoed to ContractorUK:

“Reeves promised to not increase taxes on working people, but her Autumn Budget increases the minimum wage by 6.7% and employers national insurance by 1.2% to 15%.

“And Autumn Budget announces that the secondary threshold, above which employer NI is payable, will drop from £9,100 to just £5,000 annually.

“Combine all three, and some people working at running businesses could suffer a tax increase of between 13% and 15%.”

‘Sleight of hand by the chancellor’

Chris James of Inflow Finance called such tax increases, in conjunction with the chancellor’s “working people” rhetoric, “sleight of hand.”

The alternative lender’s chief financial officer, Mr James said: “When any employer considers a hire, they think of total cost, including Employer’s NIC and pension costs -- the gross cost of a worker.

“The Employer’s NIC rise and crucially, threshold change will raise a fortune [for HMT].

“But it is making every worker with a regular job cost their employer at least £750 more per year. Is that really going to stimulate growth?”

‘Higher Employer National Insurance will put up prices for us all’

A former head of limited company accounting , Mr James said the impact should be lessened for some small employers, as Reeves yesterday increased the Employment Allowance.

But despite more employers eligible for the EA (one-person businesses remain ineligible), higher Employer NICs will “put up prices for all of us, including those of us who are ‘working people’.”

Mr James says: “The idea that this Budget won’t impact ‘working people’ is just plain silly.”

‘Minimum wage worker industries to be hit’

SafeRec’s Mr Sauca is equally concerned: “The increase in Employer National Insurance contributions, combined with the rise in the National Minimum Wage, is set to significantly impact industries employing minimum wage workers.

“We are likely to see a substantial increase in Elective Deduction Models, disproportionately affecting the most vulnerable in the workforce.”

‘Reeves hit umbrella workers in the pocket’

Andy Chamberlain of IPSE told ContractorUK: “The two measures announced…[by Reeves] on Employer NIC -- increasing the rate to 15% and reducing the threshold to £5,000 -- will directly hit the pockets of umbrella company workers.

“Umbrellas take their NI costs from the workers’ gross pay, so thousands of these workers will be significantly hit from next April.”

‘Many contractors only use umbrellas because of IR35 reform’

Director of policy at the Association of Independent Professionals and the Self-Employed (IPSE), Mr Chamberlain added:

“Let’s also not forget that many, maybe most, of these taxpayers don’t want to be in an umbrella in the first place.

“They are only there because of the changes to IR35, which the chancellor failed to address in [the Autumn] Budget.”

Guidance on Employer NICs increase for limited company contractors

Contractor-directors of their own limited company will want to take either a lower salary to negate higher ERNICs or accept they will pay some from April, says Yolo Wealth.

It will particularly sting, though, because many contractors are currently able to avoid paying Employer NI altogether, by taking a salary just below the threshold, currently £9,100, says chartered accountancy firm Jenner & Co.

‘Take an Employer National Insurance Contributions hit’

But from April 2025, the threshold will reduce to £5,000, forcing directors to “take a hit” on employer’s national insurance, the accountancy firm said.

The twist is that directors of working age need to maintain their national insurance record, says the firm, if they want entitlement to the full state pension on retirement. 

And to qualify for the national insurance credit, an annual salary of at least £6,500 will be required from April 2025 -- pushing directors over the new £5,000 Employer NI threshold.

‘Autumn Budget 2024 leaves limited company contractors further out of pocket’

“Current best-practice advice for single-director limited company contractors with straightforward circumstances is to take a salary of £9,100 and the remainder of company income as dividends,” Jenner & Co’s manager Lisa Somerton told ContractorUK.

“From April 2025, best-practice advice will be to reduce the salary to £6,500. This means contractors will pay a small amount of employer’s national insurance of -- £225. 

“In addition to this, though, there is a reduction in corporation tax relief due to the lower salary. That leaves contractors further out of pocket.”

‘Not good news for Personal Service Companies’

“The Employer National Insurance increase is indeed not good news for Personal Service Company directors,” says Beansprout Consultancy boss Helen Christopher.

A chartered accountant, Ms Christopher advised: “With most taking a salary around the personal allowance of £12,570, their monthly Employer NI bill will rise from £39.90 to over £90 -- a significant hike.

“And although the Employment Allowance has been raised to £10,500, that won’t help PSCs as the rules specifically exclude companies with only the one director on the payroll.

“So once again the small businesses have been hit with a heavy burden.”

‘Impact off-payroll sector workers’

ReLegal Consulting assessed four Autumn Budgetary measures in the round.

The legal firm says: “The ERNICs rate rise coupled with the lowering of the threshold will impact directly on those workers in the off-payroll sector.

“So, whether it be an umbrella company worker, an inside IR35 contractor or a director of a personal service company, these workers will all be impacted by this change in taxation.

“The only good news, then, is that the government has promised to clamp down on umbrella company fraud.

“That said, at the same time, the chancellor announced a doubling of the Employment Allowance.  And the EA is fertile ground for Mini Umbrella Company or MUC fraud so, that needs to be looked at.”

More on BADR/ CGT rate increase in April 2025 and April 2026

SG Accounting’s Jon-Marc Spatcher says he expects some contractors looking to shut their business will be “keener” to do so before the Business Asset Disposal Relief changes take place from 2025/26.

Dolan Accountancy’s Zeeshan Anwar says the change to BADR (at Autumn Budget chapter 2.49), is one of the chancellor’s tax hikes which could “raise concerns about the impact on individuals and their businesses.”

‘Predictable tax system’

But Labour claims by “phasing in” the BADR rate-increases, it “demonstrates the government’s commitment to a predictable tax system.”

Beansprout hints it’s somewhat of a let-off, as, unlike newly announced increases to CGT, the uplifted BADR/IR rates haven’t been put into place immediately.

‘Higher CGT rates apply from today’

Beansprout’s Ms Christopher explained: “[Unlike the rate for BADR] the increases in Capital Gains Tax rates apply from today [with the lower rate increasing from 10% to 18%, and the higher rate from 20% to 24%].

“So if your transaction hasn't been completed [by midnight last night], the higher CGT rates apply.”

‘Inhibiting the profitability of companies’

Alan Watts, a retired IT contractor, yesterday evening confessed that he was scratching his head a bit at the chancellor’s choices, including on Capital Gains Tax.

‘Malvolio’ on the CUK forum, Watts told ContractorUK: “Chancellor Reeves made several mentions of growth and income in her Autumn Budget this afternoon.

“But then unveiled a lot of things such as NMW rises, NIC rises and CGT reforms that will actively inhibit the profitability of the companies that are the source of that growth.

“Major government infrastructure projects look good to the public, but they don’t generate wealth in isolation. They are paid for by the taxpayer -- including those same companies.”

‘Feels like businesses will pick up a significant chunk of the bill’

According to Autumn Budget’s official costings, the CGT package including the immediately applicable rate increases and the BADR/IR hikes, will raise a total of £8.9billion for the exchequer.

Downbeat, Mr Spatcher at SG Accounting reflected: “This budget feels like businesses will pick up a significant chunk of the £40bn extra tax bill through the proposed changes.”

Autumn Budget key measures affecting contractor personal financial planning

• NO FRESH FISCAL DRAG

Despite fears of an extension, the freeze in the personal tax allowance (£12,570) was not added to, meaning the threshold will increase by the rate of inflation from April 2028.

• NO MORE NON-DOMS

Non-dom tax status is to be abolished from April 6th 2025, meaning any individual who has been a UK tax resident for over four years will be subject to UK tax on worldwide income and capital gains.

• PETROL PUMP PRICE PLATEAU

Fuel duty rates are frozen for 2025/26, representing a £59 saving for the average car driver. And the temporary 5p cut in fuel duty rates will be extended by 12 months and will expire in March 2026.

• CHEERS!

A penny will be coming off the cost of a draught (average strength) pint of beer from February.

Other Autumn Budget announcements relating to contractor mortgages

• At Autumn Budget chapter 3.36, the government says it plans to make the Mortgage Guarantee Scheme “permanently available to support lending at 95%.”

• Invest £25m to deliver 3,000 energy-efficient new homes across the country, with the aim of all being “affordable”.

• Approval of £47m to support the delivery of up to 28,000 homes that would otherwise be stalled due to nutrient neutrality in affected catchments.

Autumn Budget 2024: Final thought from a ContractorUK reader

IT contractor Steve Strain, a digital transformation programme specialist, says before, during, and even after Autumn Budget 2024, the government kept on with its “ham-fisted” definition of “working people.”

Strain said last night in a statement to ContractorUK: “Labour’s focus on only those deriving earnings from a wage slip is an attitude fit for a traditional 20th-century economy – an economy where people were either workers or fat cats

“Well, much of professional society has moved on. The reality in the 21st-century is that the emergence of technology, a desire for more flexibility, and more control over their careers, means a growing number of hard workers must go beyond, and sometimes actively choose to go beyond deriving earnings from just a payslip.  

“Indeed, freelancing and contracting contain some of the most entrepreneurial individuals in the UK economy today. But it’s also a constituency which sadly is an easy political target -- for the Conservatives when they were in Number 10 and now very clearly for Labour too.”