This year’s Budget announcement comes with a number of key changes that will impact agency owners across the UK. From wage increases to tweaks in National Insurance and shifts in Capital Gains Tax, there’s a lot to unpack!

We’ll walk you through the highlights—explaining what’s changing and what it might mean for your agency’s bottom line. Whether it’s the new minimum wage rates or the latest on benefits in kind, our breakdown will help you stay on top of the latest updates and make more informed decisions for your business. Let’s dive in!

National Minimum Wage

The national minimum wage will increase by 6.7% from April 2025 for those ages 21 and over.

	2024/25	2025/26	2024/25	2025/26
	Hourly	Hourly	Annually*	Annually*
21+	£11.44	£12.21	£22,638	£23,873
18-20 year olds	£8.60	£10	£16,815	£19,552
Apprentices	£6.40	£7.55	£12,513	£14,762

 

*Based on a full-time employee working 37.5 hours per week

 

National Insurance

Employers pay national insurance in addition to their salary when employing staff.

Employers’ national insurance is based on an employee-by-employee basis and is only charged when an employee earns over £9,100, this is known as the secondary threshold. 

The secondary threshold is decreasing to £5,000 from April 2025 which therefore means national insurance will be payable on an extra £4,100 for these employees.

Furthermore, the rate of employers’ national insurance is increasing from 13.8% to 15%.

Examples of Employers National Insurance per salary below:

Salary	2024/25	2025/26
24,000	2,056	2,850
30,000	2,884	3,750
35,000	3,574	4,500
40,000	4,264	5,250
50,000	5,644	6,750

 

National Insurance – Employment Allowance

The employment allowance is a tax-free threshold for most businesses who have under £100,000 of employers’ national insurance per year. 

The employment allowance is currently £5,000 which means for small businesses, they don’t pay any employer national insurance until the total employer national insurance exceeds £5,000.

The allowance is increasing from £5,000 to £10,500.

 

Capital Gains Tax

Capital Gains tax is charged when assets are sold, and a gain is made. This is generally charged on properties (apart from your main residence), shares and business assets.

There are assets that are exempt from capital gains tax. 

The rate of capital gains is based on if you are a basic or higher-rate taxpayer.

	6th April 2024 – 29th October 2024	30th October 2024 Onwards
Basic Rate	10%	18%
Basic Rate: Residential Property	18%	18%
Higher Rate	20%	24%
Higher Rate: Residential Property	24%	24%

 

Capital Gains Tax – Business Asset Disposal Relief (selling your business)

If you own a company and you decide to sell your shares, you may be eligible for Business Asset Disposal Relief. 

This is a relief which attracts a lower rate of capital gains tax regardless of your earnings (i.e applies if you are a basic or higher rate taxpayer). 

The rates are changing too:

	BADR Rates
2024/25	10%
2025/26	14%
2026/27	18%

 

Electric company cars

Currently, the government offers 100% first year allowances if you purchase an electric vehicle.

This means that you can deduct the cost of an electric vehicle from your taxable profits which subsequently reduces the amount of corporation tax due.

This allowance has been extended for a further year.

 

Umbrella companies 

The Government plans make recruitment agencies responsible for accounting for PAYE on payments made to individuals via umbrella companies.

The recruitment agency will be responsible for operating and deducting PAYE.

This will be in place from 6th April 2025. 

 

Personal allowances 

Each person who earns under £100,000 per year is eligible for the personal allowance.

This means that the first £12,570 of earnings are tax free.

It has been confirmed that the personal allowance will remain at £12,570 until 2028/29. 

 

Increases to interest payable on unpaid HMRC debt

HMRC charges interest on any unpaid debts.

The current rate of interest is 2.5% plus the base rate (7.5% today)

From 6th April 2025, this will be changing to 4% plus the base rate.

 

Benefits in Kind

The Government has reported that from 6th April 2026, most benefits in kind must be reported and any taxes due are paid in real time via payroll software. This is expected to remove the need for P11D’s.