What the autumn budget 2024 means for small businesses?

1. Employer National Insurance Contributions Increase

From April 2025, Employer National Insurance Contributions will increase to 15%. The government has boosted the Employment Allowance to £10,500 to help offset this, but businesses may still feel the pinch.

How will this impact small businesses? Small businesses should prepare for increased employment costs. Reviewing budgets and potentially cutting back on non-essential expenses can help manage this shift. Consider hiring strategies that optimise costs while making the most of the Employment Allowance.

2. Minimum Wage Increase

The national living wage will rise to £12.21 an hour in April, with similar increases for younger workers. While it’s great news for employees, this can put pressure on businesses with tight profit margins.

How will this impact small businesses? Expect increased payroll expenses. To manage, small businesses might need to streamline operations or explore affordable technology solutions to offset the extra costs. This change could also present a good opportunity to attract top talent.

3. Capital Gains Tax Increase

Higher Capital Gains Tax rates come into effect in April 2025, affecting those selling business assets or properties.

How will this impact small businesses? If you’re planning to sell assets, prepare for a heavier tax burden. Consulting with a tax professional early on might help you make strategic decisions that minimise tax liabilities.

4. Freeze on Fuel Duty

In a move to support businesses with significant transportation costs, the government has frozen fuel duty, maintaining it at current levels. This aims to provide stability in fuel expenses for the coming year.

How will this impact small businesses? For small businesses that rely on vehicle use, whether for deliveries, services, or commuting, the freeze on fuel duty could mean cost savings, especially in an environment of fluctuating energy prices. This can help protect margins for businesses with transportation needs.

With these changes on the horizon, planning ahead and adapting your business strategies can make a significant difference.