The Autumn Budget and what the changes mean for you

The Autumn Budget has introduced several changes that will affect owner-managed businesses across the UK. These updates touch on tax rates, allowances, and sector-specific policies that are important for financial planning. Here’s a breakdown of what the announcements mean for you and your business, along with practical advice on staying ahead.

Increase in employers’ National Insurance contributions

From April 2025, employers’ National Insurance contributions (NICs) will rise by 1.2 percentage points, taking the rate from 13.8% to 15% for salaries above £5,000. This is a significant change, as the threshold was previously set at £9,100, meaning more salaries will now be subject to NICs. The government anticipates this will bring in additional revenue to fund public services, but for businesses, it represents a rise in employment costs.

How this affects your business:

• Payroll costs: Review your payroll budget and consider how this increase might affect your bottom line. If you’re planning to expand your team, factor in the higher contributions when calculating costs.
• Workforce strategies: Consider whether outsourcing or investing in automation might help manage costs effectively.

We recommend using this time to assess your payroll systems and ensure they’re ready for the upcoming changes.

Adjustments to income tax thresholds

Income tax thresholds are set to rise in line with inflation after 2028. While this change is a few years away, its implications are worth considering now to manage long-term tax liabilities.

Key points to keep in mind:

• These adjustments will likely affect individuals on higher incomes or those who receive dividends from their businesses.
• Inflation-linked increases may shift more income into higher tax bands over time, so reviewing your remuneration strategy could be beneficial.

For now, it’s important to stay updated on thresholds for the current tax year. The personal allowance remains at £12,570, with the higher rate threshold set at £50,270, and the additional rate threshold at £125,140.

Changes to inheritance tax and capital gains tax

Changes to inheritance tax (IHT) and capital gains tax (CGT) will have a notable impact on succession planning and asset management for business owners:

• Inheritance tax freeze: The IHT threshold will remain at £325,000 until 2030. From April 2027, pensions will also count as part of an estate’s taxable value for IHT purposes.
• Capital gains tax: For disposals made on or after 30 October 2024, the lower rate for basic-rate taxpayers has increased from 10% to 18%, and the higher rate for higher-rate taxpayers has risen from 20% to 24%.

What this means for you:

If you’re planning to pass down your business or other assets, now is the time to reassess your strategy. Consider seeking advice on using tax-efficient vehicles such as trusts or transferring assets while rates remain relatively stable.

Relief for small businesses: Employment Allowance increase

In a move aimed at supporting small businesses, the Employment Allowance will increase from £5,000 to £10,500. This allows eligible employers to offset more of their NIC liability.

How to make the most of this change:

• Check if your business qualifies for the allowance (you must have NIC liabilities of £100,000 or less in the previous tax year).
• Use the additional relief to reinvest in your business, whether that’s hiring new staff, upgrading equipment, or funding training initiatives.

Sector-specific updates: Retail, hospitality, and leisure

The government has introduced several measures targeting the retail, hospitality, and leisure sectors:

• Business rates reduction: The Autumn Budget 2024 announced that, starting in the 2026/27 tax year, there will be permanently lower business rates for retail, hospitality, and leisure properties. This measure aims to level the playing field for high-street businesses.
• Transport costs: The single bus fare cap in England will rise to £3 from 2025. This could indirectly impact customer footfall and staff commuting expenses.

For businesses in these sectors, it’s an opportunity to evaluate operational costs and consider how these changes might affect pricing strategies or customer behaviour.

Energy cost support for businesses

Energy costs remain a challenge for many businesses. While the budget did not extend the current Energy Bill Relief Scheme, it outlined plans to introduce more targeted support for energy-intensive industries. Details are expected in the next budget cycle.

Steps to consider:

• Audit your current energy usage and explore ways to improve efficiency.
• Consider renewable energy solutions or government-backed schemes that may provide financial support.

Planning ahead: How to prepare for the changes

The changes introduced in the Autumn Budget highlight the importance of staying proactive with financial planning. Here are some steps you can take to ensure your business is prepared:

1. Stay informed: Regularly review updates from HMRC and industry experts. Being aware of upcoming changes can help you plan effectively.
2. Seek professional advice: Consult with your accountant or tax advisor to explore strategies that optimise your tax position. Whether it’s adjusting salaries, utilising allowances, or managing business expenses, professional guidance can make all the difference.
3. Use technology: Investing in accounting software can help you keep track of tax obligations and streamline financial processes, ensuring compliance with minimal hassle.
4. Review your cashflow: With increased costs on the horizon, keeping a close eye on your cash flow will be essential. Consider creating a buffer to cover unexpected expenses.

At Stapletons, we’re committed to helping owner-managed businesses adapt to changes in the tax system. If you’d like support reviewing your current financial strategy or planning for the future, we’re here to help.

Looking ahead: Balancing challenges and opportunities

While the Autumn Budget introduces several challenges, it also presents opportunities for growth and adaptation. Whether it’s making the most of the Employment Allowance increase or preparing for future tax rate changes, taking a proactive approach can help your business thrive.

We’re here to provide practical advice and support tailored to your needs. Our team can help you understand how the changes apply to your specific circumstances, so you can focus on what matters most – running your business.

Get in touch with Stapletons if you have any questions regarding the Autumn Budget.