UK Autumn Budget
Chancellor of the Exchequer, Rachel Reeves MP, announced the UK Autumn Budget 2024, in the UK Parliament this afternoon (Wed 30th October). You can read the associated HM Treasury Press Release and full budget breakdown by following the link.
Key announcements that are relevant to the Scottish convenience sector, include:
Employment – National Living Wage will rise by 6.7%, from £11.44 to £12.21 an hour in April 2025. The National Minimum Wage for 18 to 20-year-olds will also rise from £8.60 to £10.00 an hour. Over time, the government intends to create a single adult wage rate.
Taxation (workers) – National insurance and will remain the same for workers. The government will not extend the freeze to income tax and National Insurance contributions thresholds. From April 2028, these personal tax thresholds will be uprated in line with inflation. VAT will remain the same at 20%.
Taxation (employers) - The Chancellor has announced £40 billion in tax increases. Employers' National Insurance contributions will rise from 13.8% to 15% and the threshold at which employers pay will be lowered to £5,000 from £9,100. Employment Allowance gives employers with NICs bills of £100,000 or less a discount of £5,000 on their employer NICs bill. This will increase to £10,500 next year. Corporation Tax will be capped at 25% for the duration of the Parliament. Corporation Tax Small Profits Rate and marginal relief will be maintained at their current rate and thresholds. For 2025-26, eligible retail, hospitality, and leisure (RHL) properties in England will receive 40% relief on their business rates liability.
Vaping and Tobacco – The UK Government will renew the tobacco duty escalator at RPI +2% and increase duty by 10% on hand-rolled tobacco this year. A flat-rate excise duty on all vaping liquid will be introduced from 1 October 2026 at £2.20 per 10ml vaping liquid, accompanied by an equivalent one-off increase of £2.20 per 100 cigarettes / 50g of tobacco in tobacco duty to maintain the financial incentive to switch from tobacco to vaping.
Scotland - £3.4 billion will be provided to Scotland through the operation of the Barnett formula in 2025-26. £0.75 million will be provided to establish Brand Scotland, a programme run by the Scotland Office to promote Scottish investment opportunities and exports across the globe.
HFSS Advertising – Plans include restricting junk food advertising on TV and online; and gradually end the sale of tobacco products across the country. Announced measures include a ban on the design of branding & advertisement of Nicotine Vaping Products that may potentially be attractive to children.
Small Businesses - The UK Government will bring forward a Small Business Strategy Command Paper in 2025, setting out the government’s plans to support small businesses (unclear on effect this will have on Scottish businesses).
Retail Crime - The UK Government will invest at least an additional £150 million in tackling national security threats and serious organised crime in 2025-26. Continued investment to support frontline policing levels and a new commitment to tackling shop theft in England.
Soft Drinks – the Soft Drinks Industry Levy (SDIL) will be increased, over the next five years, to reflect the 27% CPI inflation between 2018 and 2024.
Fuel Duty - The UK Government will freeze fuel duty and extend the temporary 5p cut for one year. Annual rate increases will take place on 1 April. The government will also freeze fuel duty rates for 2025–26.
Company Car Tax - The UK Government is in the process of setting rates for Company Car Tax (CCT) for 2028-2029 and 2029-30. CCT rates will incentivise the take-up of electric vehicles.
Alcohol - Alcohol duty rates on non-draught alcoholic products will increase in line with RPI inflation. These measures will take effect from 1 February 2025.
The Scottish Government will deliver its winter budget on December 4th.
We hope this has been useful for keeping members informed and will continue to update members with any future policy developments.