Autumn Budget 2024: Two Key Considerations For Soletrader Business Owners
Autumn Budget changes for Soletraders weren’t widely covered in the press for unincorporated businesses, which kind of leaves us wondering – ‘did we miss anything important?’ 🤔
I ran a poll a couple of weeks back, and over 40 business owners told me they wanted a clear lowdown on key implications specifically on the Autumn Budget considerations for soletraders.
While there’s not a lot of ground breaking news to share, there are two key updates you’ll want to be aware of:
1️⃣ Class 2 NICS
From April 2025, if your profits are between £6,725 and £12,570, you’ll no longer need to pay Class 2 NICs. Your record will be protected automatically.
For profits below £6,725, voluntary contributions are still needed to secure benefits like the State Pension. At a rate of £3.50 per week from April 2025– up slightly from £3.45.
2️⃣ Making Tax Digital (MTD)
The government has confirmed that MTD is still going ahead. This initiative is about moving away from paper or spreadsheet records to using MTD-compliant software for maintaining and filing your figures digitally.
The rollout begins in April 2026 for those with an annual income over £50,000. In April 2027, it will expand to those earning over £30,000, and it’s expected to extend to others after that.
If you’re in these income brackets, it’s worth starting to explore MTD-compliant software now to make the transition as smooth as possible.
Of course there are many benefits to using software anyway. From saving on admin time, having visibility of your income and expenses through the year, sending professional looking invoices and managing money owed etc.
👉 Extra Tip – soletraders who are employers
If you are a soletrader who also employs staff, check out my upcoming article on the budget especially for employers. It will contain important practical updates for you on minimum wage and employers NICs.
Note: this is general guidance only (published in November 2024). Speak to an advisor/accountant directly about your specific set up.
Harriet Formby MA ACA is a Chartered Accountant, Fractional CFO and Business Mentor helping small businesses, SMEs and start-ups dedicated to changing the world for the better.
After growing disillusioned with making and managing money for faceless entities, she left the big corporate world of finance and founded Below The Line Finance in 2020 and shortly after Get Number Savvy.
Via 1:1 consultations, CFO retainers, courses, workshops and resources for companies with both micro and £1m+ budgets, she brings a more human side to finances, helping people not only see that they can make profit in an ethical way, but helping them get there too.
Clients regularly tell Harriet they’ve never had a CFO who ‘gets it’ like her, which is only strengthened when they find out that she works ‘off-grid’ by a beautiful meadow and meandering stream surrounded by a herd of retired racehorses, pet sheep, Dartmoor ponies, a rich array of wildlife and always with a dog or two close by.
