30 October 2024

Two months ago the new Prime Minister warned that today’s Budget would be painful and it certainly was for businesses, particularly owner-managed businesses.

The majority of the extra £40bn of tax that was announced in today’s Budget will fall on the business sector, with £25bn alone being collected from the two changes that were announced in relation to employers NIC (the 13.8% rate being increased to 15% and the starting threshold being reduced from £9,100 to £5,000).  When coupled with the increase in the minimum wage and the cost of implementing the recently announced new employment laws some businesses might even describe today’s Budget as brutal!

Owner-managed businesses have the additional worry over the changes that were announced in relation to Business Property Relief whereby some will have a significant proportion of their business subject to Inheritance Tax which may prevent the passing down of the business to the next generation and force a sale of the business instead.

If the additional £40bn of tax and NIC ultimately leads to significantly improved public services then many people (including businesses) will accept that “the pain is worth the gain” but given that the government’s strategy for improving public services has been publicly stated as being dependent upon generating economic growth there is a degree of worry over whether today’s announcements will achieve the government’s stated aim.  Furthermore, the independent OBR’s report suggests that future economic growth may be relatively weak following today’s announcements.

The government have indicated that today’s Budget is intended to do most of the “heavy lifting” during the course of their 5 year term and they don’t have any plans to raise significant levels of tax in future Budgets.  Many businesses will certainly be hoping that this is true, but will no doubt remember what was said in the run up to the Election!

The Autumn Budget 2024 announcements cover the following topics:

Please click here to read and download the Autumn Budget 2024 highlights in newsletter format.

If you have any queries on the Autumn Budget 2024 please do not hesitate to contact one of our tax specialists on 01228 530913 or 01768 864466 or by email at hello@doddaccountants.co.uk.