The Autumn Budget 2024 - what does it mean for small businesses?

In this article Zyla accountants examine the possible announcements that Chancellor Rachel Reeves might make ahead of the Autumn Budget 2024,

It's Labour's first Budget since winning the General Election in July 2024.

A £22 billion 'black hole' has been reported in the UK's finances, the highest since World War II.

As a result of limited media leaks, we don't know much about what is to come. As Prime Minister Keir Starmer has said, "Those with the broadest shoulders should bear the heaviest burden," so that's some indication.

So far, here is what we know.

What is the date of the Autumn Budget 2024?

This year, the Autumn Budget falls on 30 October 2024.

At what time will it take place?

It normally starts after Prime Minister's Questions (PMQs) ends at 12:30pm and lasts about an hour.  

Where can I watch the Autumn Budget 2024?

There will be a live broadcast of the Budget on the BBC and a live stream on ParliamentTV.

In the Autumn Budget of 2024, what could be expected?

In the Autumn Budget, we could see the following announcements.

According to Labour, corporation tax will be frozen at 25% and full expensing will be maintained throughout parliament. In addition, they have reaffirmed their pledge not to increase VAT, income tax, or national insurance.

These areas may be where changes are seen as a result of filling this black hole.

The National Minimum Wage is rising

As part of Labour's Make Work Pay plan, workers will be paid a 'genuine living wage', with an aim of paying the same wage to all adults. From April 2025, the National Minimum Wage is set to increase, with a larger increase for young workers between 18 and 20.

Employers' National Insurance increases

Jonathan Reynolds, the business minister, suggested on Sky News' Sunday Morning that the promise not to raise National Insurance was specifically in the manifesto. Employers could see a rise based on this sign.

Capital Gains Tax increase

Due to historic low rates of capital gains tax (CGT), it is an obvious target for tax reform. The CGT rate could be raised by Reeves so that it is equal to income tax. Additionally, the government can reduce the annual CGT exemption, which currently stands at £3,000, in order to increase the burden of Capital Gains Tax.    

Business Asset Disposal Relief

Capital Gains Tax provides Business Asset Disposal Relief. Up to the value of £1m, business assets are taxed at a lower rate of 10%. The limit could be lowered.  

Reductions or removals of inheritance tax reliefs

There are many ways in which IHT can be reformed. According to RJP, one way to limit IHT relief for business and agricultural assets is to cap it at £500,000 per person. Another option is for the government to cap or reduce 100 percent business relief, or to tighten agricultural relief criteria.

Incentivising green investments

As part of the government's climate targets, we may see more business incentives to implement renewable energy and reduce carbon emissions.

A roadmap for business taxes

A 'business tax roadmap' was promised by Labour within six months of being elected. It appears that Budget day will be that day. During the term of this government, it will outline how business tax will be structured.

For support with your business finances, contact Zyla Accountants today.

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An overview of the Budget 2024

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