Autumn Budget 2024 - PwC Northern Ireland comments

  • Cat McCusker, Regional Market for PwC in Northern Ireland said: 

    “We welcome the Chancellor’s announcement that the Autumn Budget will provide an additional £1.5 billion for Northern Ireland, which will allow for substantial and vitally needed investment into schools, housing, health and social care, and transport. It’s also very encouraging news that the Treasury will provide £730,000 to support our schools in the region as they work towards further integration.

    “Growth and City Deals will proceed in Causeway, Coast and Glens, and Mid South West regions, with £162 million of investment over 15 years, to support economic growth in our rural regions, which play a hugely important role in our agricultural sector.

    “It is really promising to see that the Chancellor has raised the National Living Wage to £12.21, as part of the Government’s commitment to a 'Genuine Living Wage' for all adult workers.

    Related: Sync NI Q&A with PWC’s Cat McCusker

    “Young people aged 18-20 will see the biggest benefit from the new minimum wage policy. Their hourly rate will jump by 16.2% to £10.00, the highest increase ever recorded. It will be interesting to see how this impacts young people unemployed in Northern Ireland, where, according to the latest data from NISRA and the ONS, youth inactivity among 16-24 year olds stands at 49.03%, compared to the UK average of 41.7%. This rise in hourly rates comes in the midst of NI Economy Minister Conor Murphy implementing new skills interventions that will underpin his Economic Vision - so this hourly rate rise may incentivise more of our young people to engage in developing new skills and contributing to our economy.”

    Mari McLarnon, Tax Director for PwC Northern Ireland, said:

    “The Chancellor’s Autumn Budget introduced several meaningful changes that will affect both individuals and businesses. Many will feel positive that the Chancellor stayed true to the manifesto pledge to not raise income tax, National Insurance and VAT, and bigger spending on public services. The hefty £40bn in tax rises will land harder on businesses, many already feeling the pressure.

    “The 1.2% increase in Employer’s NIC to 15% from April 2025, coupled with the reduction in the secondary threshold over which NIC is payable from £9,100 to £5,000 will have a considerable impact on larger local employers, and will lead to those sectors with a higher volume of part time workers seeing a larger increase in their overall workforce costs.  The increase in the Employment Allowance from £5,000 to £10,500 offers some protection for smaller employers, which will be a welcome relief. 

    “With both NLW and NIC increases taking effect from April 2025, employers should act now to understand the impact of the combined changes. This includes the impact on pay differentials, pay bands and how they will maintain competitiveness for attraction and retention. Many employers make use of salary sacrifice arrangements, which will now be more attractive and mitigate some of the impact of the NIC rate increase, however additional care will be needed as more employees may be paid close to the new level of NLW.” 

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