The UK’s Autumn Budget 2024, presented by Chancellor Rachel Reeves, introduces a series of measures to address the nation's economic challenges while creating growth opportunities. Businesses across the UK will be significantly impacted by changes to taxes, employment policies, and public spending. Our Worcester accountants take an in-depth look at what the budget means for businesses and how you can prepare for the road ahead.
If you would like to find out more about any of the points mentioned, reach out to our local accountants at Chandler & Partners and we’ll advise you further!
Key Changes in the Autumn Budget 2024 Affecting Businesses
1. Employers' National Insurance Contributions
From April 2025, employers’ NICs will rise by 1.2 percentage points, increasing the rate to 15%. Additionally, the threshold at which businesses start paying NICs will be reduced from £9,100 to £5,000.
Impact on Businesses:
This change is expected to generate £25 billion annually for the Treasury but could increase operational costs for employers. Small and medium-sized enterprises (SMEs) may need to reassess budgets, potentially affecting hiring plans.
2. National Living Wage Increase
The National Living Wage will rise to £12.21 per hour from April 2025, a 6.7% increase. While this benefits employees, it poses challenges for businesses with large workforces in lower-wage sectors.
Action Point for Businesses:
Employers should review payroll systems, budget for the wage increase, and explore efficiency improvements to manage higher salary costs. At Chandler & Partners, our accountants in Worcester will work with you to analyse your payroll cost and how to budget for this aspect of your business.
3. Stamp Duty Land Tax (SDLT) Changes
A 2% rise in SDLT for second-home buyers and property investors takes effect in April 2025. This is expected to cool property markets and reduce speculative investments.
Relevance to Businesses:
Commercial property investors may face higher upfront costs, impacting cash flow and investment decisions.
4. Income Tax Threshold Freeze
The freeze on income tax thresholds until 2028 means that as wages rise, employees will move into higher tax brackets. This "fiscal drag" could indirectly affect businesses by reducing disposable income and consumer spending.
5. Capital Gains Tax and Inheritance Tax Adjustments
Capital Gains Tax rates will increase for higher earners.
Inheritance tax reforms will include pensions in the taxable estate from 2027, potentially impacting planning succession strategies for your business.
Opportunities for Businesses in the Budget
1. Investment in Public Services
With £22.6 billion allocated to the NHS and £6.5 billion for schools, sectors such as healthcare and education may see increased opportunities for private contracts and partnerships.
2. Housing and Infrastructure Development
An additional £5 billion for housing in 2025-26 could benefit construction firms and suppliers. Businesses involved in affordable housing and infrastructure stand to gain from the increased investment. At Chandler & Partners, we have a team of construction accountants and property accountants who know the intricacies of your industry, so we can help you navigate these changes.
Why Choose Chandler & Partners for Business Accounting Support?
Navigating the complexities of the UK Autumn Budget can be challenging, but with expert guidance, your business can turn potential hurdles into opportunities. At Chandler & Partners, we specialise in providing tailored advice for businesses of all sizes. We can support your business with the changes in the new budget, so you can feel confident about the financial stability of your organisation.
Our Accounting Services Include:
- Tax planning and compliance
- Strategic business planning
- Payroll management
- Succession planning and wealth management
Contact our Accountants in Worcester
For further information on what the Autumn budget 2024 means for your business, reach out to our team of professional accountants in Worcester.