Cut to duty on draft alcohol
Chancellor Rachel Reeves has announced that there will be a cut to duty on draft alcohol.
The Chancellor said: “Which means a penny off the pints at the pubs,”.
The Chancellor also said that alcohol duty rates on non-draught products will increase, in line with Retail Price Index (RPI), from February 2025.
Tobacco Duty
The Chancellor said that the government will renew the tobacco duty escalator at RPI +2%, this means an increase on duty, of hand-rolled tobacco, by 10% this year.
Additionally, the government will introduce a “flat-rate” duty on all vaping liquids as of 2026. There will also be an increase on tobacco duty, which it hopes will continue to be an incentive for smokers to quit.
Employment Allowance
Employment Allowance (EA) will be increased to help smaller businesses.
EA will rise from £5,000 to £10,500, and the Chancellor said this will mean around 865,000 employers will not pay any National Insurance in 2025.
National Insurance
National Insurance (NI) is set to rise to 15% for employers. The Chancellor announced that employers’ NI contributions will rise, by 1.2%, from 13.8% up to 15%.
Additionally, businesses will start paying National Insurance on a workers’ earnings will be lowered from £9,100 to £5,000.
No extension of income tax and NI thresholds
The Chancellor announced that there will be not be an extension to the freeze on income tax and NI thresholds.
Business rates
The current business rates discount is 75%. This is due to expire in April 2025.
This will be replaced by a 40% discount, up to a maximum discount of £110,000.
