Chancellor Rachel Reeves’ first Autumn Budget introduces several significant changes that will affect businesses across the UK. As your trusted financial advisors, we’ve analyzed the key changes to help you understand their impact on your business and plan accordingly.
Key Changes at a Glance
Employment Costs
- National Insurance: Employer NICs increasing from 13.8% to 15.0%
- Employment Allowance: Doubled to £10,000 (benefiting approximately 1 million small businesses)
- National Living Wage: Rising to £12.21 per hour (effective April 2025)
Tax Changes
- Corporation Tax: Capped at 25% for the remainder of this parliament
- Capital Gains Tax: Increased rates
- Basic rate taxpayers: 10% to 18%
- Higher rate taxpayers: 20% to 24%
Business Investment
- Full Expensing: Permanent continuation of the policy for qualifying plant and machinery investments
- Business Rates: Reduction in relief, potentially affecting retail and hospitality sectors
What These Changes Mean for Your Business
Immediate Actions to Consider
- Review Your Payroll Structure
- Calculate the impact of increased NICs on your wage bill
- Assess eligibility for the enhanced Employment Allowance
- Plan for the National Living Wage increase
- Evaluate Investment Timing
- Consider bringing forward capital expenditure to benefit from full expensing
- Review your asset purchase strategy for the coming year
- Business Exit Planning
- Reassess exit strategies in light of CGT changes
- Consider timing of asset disposals
Long-term Planning Considerations
- Review your business structure to ensure it remains tax-efficient
- Evaluate staffing models and automation opportunities
- Consider the impact on pricing strategies and profit margins
Sector-Specific Opportunities
Emerging areas for growth include:
- Healthcare technology
- Digital services
- Sustainable business practices
- Innovation-driven sectors
Looking Forward
While the Autumn Budget 2024 presents various challenges, it also creates opportunities for strategic growth and adaptation. Success in this new environment requires:
- Proactive financial planning
- Strategic business positioning
- Efficient resource allocation
- Innovation focus
Conclusion
The Autumn Budget 2024’s impact on UK small businesses requires careful navigation. Understanding these changes and implementing appropriate strategies will be crucial for business success in the evolving economic landscape.
