Key Takeaways for Businesses from the Autumn 2024 Budget

Here is a breakdown of the key points from the Autumn 2024 UK budget that directly affects businesses.

National Insurance Contributions (NICs)

• Effective April 2025: Employers' NICs will rise from 13.8% to 15%.

• Threshold for employer NICs will decrease from £9,100 to £5,000.

• Employment Allowance Increase: Smaller employers can reduce NICs by up to £10,500 annually (up from £5,000). This will apply to all businesses, regardless of size.

Corporate Tax

• Corporation Tax: Maintained at 25% for large businesses and 19% for small profits.

• Capital Allowances: Full expensing & £1M annual investment allowance remain.

• R&D, Patent Box & Intangible Assets: No changes here, so you can continue to benefit from these tax deductions.

• New Consultations: Exploring tax treatments for predevelopment costs & updates to international tax rules.

Business Rates

• Lower Rates: Permanent, lower business rates for retail, hospitality, and leisure properties.

• Temporary 40% Relief: Available in 2025/26, capped at £110,000 per business.

• Future Reforms: Government to review and potentially reform the business rates system.

Employee Ownership Trusts (EOTs)

• Tax-Free Gains: Selling to an EOT remains eligible for capital gains tax exemptions.

• New Conditions:

  • Former owners cannot retain control post-sale.

  • Trustees of EOTs must be UK residents.

  • Conditions need to be met longer to keep tax relief.

What This Means for SMEs

These changes could impact your cost of business, tax, cash flow, and business strategy. The area with the most impact is likely to be the NICs and their cost for businesses employing those part time or on lower wages. Specifically this is likely to impact SMEs who employ in the retail, hospitality and construction sectors. The impact of the budget is likely to be very much felt for small and medium sized business. Unfortunately it may be time to re-assess your employee numbers and wages. It might even result in you having to increase prices to cover these increased costs. If you would like to discuss your options further then please get in touch.