On October 30th, 2024, the Chancellor of the Exchequer will present the Autumn Statement, which could bring significant changes to the UK’s temporary labour market. With the Labour Party delivering its first budget in years, businesses in the temporary recruitment sector should prepare for several key announcements.
The statement is expected to focus on inflation, public sector finances, and the labour market, with potential updates to income tax, National Insurance (NI) rates, and thresholds. Labour’s planned Employment Rights Bill and Single Worker Status initiative may also be addressed, which could directly impact the supply of temporary and contract workers.
Income Tax and National Insurance Updates
Traditionally, income tax and NI changes have featured prominently in the Autumn Statement, influencing businesses and workers. While recent Conservative Party budgets have reduced NI rates, Labour faces a challenging financial situation with a reported £22bn shortfall in public finances. As such, the party may need to consider tax and NI increases, which could impact recruitment agencies and their temporary workers.
A reduction in disposable income often triggers contractors to seek alternate, higher-rate assignments, whilst Employers' NI increases create the recurring agency dilemma of how to pass on the increase in employment costs without upsetting the contractor or client.
Employment Rights Bill and Single Worker Status
Labour’s proposed Single Worker Status seeks to streamline employment classifications, ensuring that all workers—full-time, part-time, or temporary—receive a standardised set of rights and protections. This could improve benefits for temporary workers but might increase costs for agencies and businesses that rely on flexible labour.
The government must balance growing the economy, a key initiative, while not stifling recruitment due to increased employment costs.
As the Autumn Statement approaches, recruitment agencies should stay informed about these potential changes. TJW Contract Solutions Limited will continue to monitor developments and provide updates.
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