The Autumn Budget 2024: Key Insights For UK Business Owners

 On 30th October 2024, Chancellor Rachel Reeves unveiled her Autumn Budget – marking the first Labour-led Budget in 14 years.
 
After uncovering a £22 billion deficit back in July, the Labour government demonstrated their commitment to restoring stability to the UK economy in the Budget. For business owners, it has mixed implications. Let’s explore them…
 
NICs and minimum wage increases
 
While the government maintained its commitment to ‘working people’ in the Budget, the Chancellor confirmed rumours that it will increase employers’ National Insurance Contributions (NICs) – these will grow by 1.2% to 15% from April 2025. The threshold on which employers pay NICs will also reduce from £9,100 to £5,000 per employee.
 
However, Labour plans on increasing the employment allowance from £5,000 to £10,500, bringing some relief to smaller businesses. The £100,000 threshold will be removed too, expanding this to all eligible employers.
 
From April 2025, the minimum wage will additionally rise from £11.44 to £12.21 for over 21s, from £8.60 to £10 for 18 to 20-year-olds, and from £6.40 to £7.55 an hour for apprentices. The move is expected to hit sectors like hospitality the hardest.
 
Financial relief for hospitality and retail
 
In a nod to key service sectors, the government has confirmed 40% business rates relief for hospitality, retail, and leisure businesses through to 2026 – capped at £110,000 per business.
 
While this does mean business rates will nearly double (replacing the 75% discount that was due to expire next year), it’s a move that will provide much-needed support for sectors that are struggling the most.
 
The alcohol duty on draught products will also be reduced – cutting a penny off the pint which should offer some welcome relief (and footfall) for pubs.
 
Changes to business taxation
 
There’s been a lot of speculation in recent weeks around potential changes to Capital Gains Tax. And while the government did confirm increases (from 10 to 18% for lower rate taxpayers, and from 20 to 28% for higher rate taxpayers), these were much less drastic than feared in pre-Budget speculation.
 
To “encourage entrepreneurs to invest in their businesses”, Reeves also announced that Business Asset Disposal Relief will remain at 10% in 2024 before rising to 14% in April 2025 and 18% in 2026/27.
 
The Budget also highlighted support for businesses through extended Research and Development (R&D) funding, which will continue to reward and compensate SMEs investing in innovation.
 
Corporation Tax will stay capped at 25% too, providing some clarity and consistency for business owners.
 
Need help with your financial planning?
 
The Autumn Budget brings important changes that could affect your growth and cash flow. If you’re looking for guidance on how to navigate these shifts, don’t hesitate to reach out to the Nabarro Poole team. Let’s work together to ensure your continued success.