Autumn Budget 2024: How Does It Impact Your Business?

The Autumn Budget 2024 has brought some critical changes for UK businesses. From business rates reform to tax adjustments, this budget seeks to balance relief for smaller enterprises with increased contributions from larger businesses and high-value properties. Here’s a breakdown of the key points affecting businesses nationwide and what they could mean for your finances.

Autumn Budget Changes 2024

Business Rates Reform: Relief for High Streets

From 2026-27, business rates will see a shift aimed at levelling the playing field for high street businesses. Lower tax rates will apply to retail, hospitality, and leisure properties, helping these sectors compete more effectively. This change is funded by increasing rates on the most valuable properties, like large distribution warehouses used by online retailers.

Impact: High-street shops, restaurants, and leisure venues will have reduced costs, enabling them to invest in improvements or expansion. Large distribution centres will face increased rates, which could lead to pricing adjustments in e-commerce.

Transition Relief and Small Business Rates Freeze

In the short term, there’s also good news: a 40% relief on rates for retail, hospitality, and leisure businesses, capped at £110,000 per business, aims to ease the transition. The small business multiplier will also be frozen for another year, providing inflation protection.

Impact: This relief offers small businesses breathing room to manage cash flow, protects against rising costs, and supports growth.

Employer National Insurance and Small Business Protection

Starting in April 2025, the employer's National Insurance rate will increase by 1.2 percentage points to 15%. Meanwhile, the threshold at which employers must pay National Insurance will be reduced, potentially affecting businesses with larger workforces. To offset this, the Employment Allowance will increase to £10,500, helping smaller employers avoid National Insurance payments for up to four National Living Wage employees.

Impact: While larger businesses may feel the increased National Insurance, smaller companies could see reduced hiring costs, making it easier to expand their teams without additional financial strain.

Encouraging Entrepreneurs: Business Asset Disposal Relief (BADR)

To incentivise reinvestment, Business Asset Disposal Relief will remain at 10% for the current year but will increase to 14% in 2025 and 18% in 2026-27. This phased approach allows entrepreneurs to plan asset sales effectively.

Impact: Entrepreneurs considering selling business assets may wish to act sooner to benefit from the current lower rate, potentially boosting investment capital for the next business cycle.

Inheritance Tax Reforms for Agricultural and Business Assets

A reformed relief structure will start in April 2026 for agricultural and business property. The first £1 million of assets will still be eligible for 100% relief, while assets beyond this amount will receive 50% relief. This change will primarily affect high-value estates, raising an estimated £2 billion to fund public services.

Impact: The change primarily affects large estates but could prompt long-term financial planning for asset-heavy businesses, particularly in farming and manufacturing.

Alcohol Duty and Support for Pubs

Duty on alcohol will now rise with RPI, except for certain products sold in pubs. Duty on draught drinks will reduce, with the government aiming to support pubs and small-scale brewers by providing a penny per pint in duty relief. Additional relief will also be extended to small brewers and cider makers.

Impact: Smaller breweries and pubs will see reduced duty costs, allowing for better margins or competitive pricing to attract patrons in a challenging hospitality market.

Corporate Tax Roadmap for Long-Term Stability

To offer predictability, the government has set out its Corporate Tax Roadmap, including a commitment to cap Corporation Tax at 25%, retain a leading capital allowance system, and maintain R&D reliefs. This long-term plan aims to help businesses invest confidently.

Impact: With clarity on the tax environment, businesses can better forecast and plan for significant investments, knowing corporation tax rates are stable and continued support for R&D and capital expenditure.

How Blue Sky Finance Can Help Your Business Navigate Changes

Navigating these changes can be complex, but Blue Sky Finance is here to help. As a specialist business finance and loans broker, we assist businesses across sectors in accessing the capital they need to adapt and grow. Whether it’s securing funding for equipment, supporting payroll during National Insurance adjustments, or investing in your high street location, our tailored financing solutions make it easier to strengthen your business while protecting your balance sheet.