Autumn Budget Reflection: What It Means for You and Your Business

The dust is starting to settle. It’s been just over a month since Chancellor Rachel Reeves presented her first Budget. To say that it’s been controversial would be an understatement. The media has been awash with accusations of broken promises and unnecessarily harsh measures.

These measures will affect various groups differently, from workers and families to business owners and investors. Here’s an in-depth look at the changes and what they mean for you.

The budget was intended to restore stability to our economy and to begin a decade of national renewal. Investment will be funded by revised debt rules to facilitate additional borrowing and a hefty £40 billion of tax rises.

The Chancellor has set the tone in advance to manage expectations. Let’s look closely at some of the key measures and how they might affect different types of businesses and individuals in different ways.

Workers and employers – navigating wage increases and tax hikes

For workers

The rise in the minimum wage to £12.21 per hour for workers aged 21 and over by April 2025 is a landmark decision aimed at improving living standards. For younger workers and apprentices, the increase is even steeper, reflecting the government’s aim to equalise wages across age groups. While this is a significant win for employees, higher wages may also contribute to inflationary pressures, potentially impacting purchasing power.

For employers

Employers, particularly in sectors like retail, hospitality, and cleaning, may find the wage increase challenging to accommodate. These industries, already operating on slim margins, could face difficult decisions, such as cutting staff, reducing hours, or increasing prices to balance budgets.

Additionally, the rise in employers’ National Insurance contributions (NICs) to 15% from April 2025 will further strain payroll costs. For small businesses, this could hinder growth plans and limit their ability to hire new staff. However, the increased Employment Allowance to £10,500 offers some relief by offsetting these rising NICs costs, though its benefit is limited to certain smaller businesses.

Families – child benefit and household finances

The High-Income Child Benefit Charge (HICBC) remains a concern for higher-earning families, applying to those with an income above £60,000. While the government decided not to adopt a household income model for this charge, the system still poses challenges for single high earners who may feel disproportionately affected compared to dual-income households. Families will need to reassess their financial planning, particularly those close to the income thresholds.

Savers and investors – freezing allowances and rising taxes

Income tax

Personal allowances and income tax thresholds remain frozen for 2025/26, continuing to affect workers and taxpayers as inflation erodes their real value. This fiscal drag means more individuals will find themselves pushed into higher tax brackets over time.

Savings and dividends

For savers, the freeze on ISA limits until 2030 provides stability, with the £20,000 annual cap unchanged. However, the decision to scrap plans for a new ‘British ISA’ is a missed opportunity for those seeking additional tax-efficient savings options. Dividend allowances remain limited to £500, which could impact income for investors reliant on dividend payments.

Capital gains tax (CGT)

Increases in CGT rates on some assets represent a significant change for investors and business owners. Gains qualifying for Business Asset Disposal Relief (BADR) will now be taxed at 14%, rising to 18% in 2026, up from the previous 10%.

For entrepreneurs planning to sell their businesses, this means careful timing and planning are essential to avoid larger tax bills. Investors in second properties, however, will see no changes, as CGT on these remains at 24%.

Property owners – stamp duty and furnished holiday lets

Stamp Duty Land Tax (SDLT):

From April 2025, the SDLT thresholds will reduce, affecting buyers across England and Northern Ireland. For first-time buyers, the reduced threshold of £300,000 offers limited relief, particularly in areas with high property prices. Those purchasing additional properties or second homes will face higher SDLT rates, with the surcharge increasing from 3% to 5%, targeting buy-to-let landlords and holiday home investors.

Furnished holiday lets (FHLs):

The abolition of the FHL tax reliefs from April 2025 is a significant shift for property owners who currently benefit from enhanced allowances. Moving forward, these properties will be taxed as standard rental income, reducing their profitability and possibly discouraging investment in the holiday rental market.

Inheritance tax: preserving wealth amid changing reliefs

The inheritance tax (IHT) nil rate band remains frozen at £325,000, meaning rising property values will push more estates into taxable territory. For estates benefitting from agricultural or business property relief, the cap of £1 million from 2026 marks a notable change. Larger estates will face increased IHT bills, prompting families to review estate planning strategies. The good news for smaller family farms and businesses is that they still retain some relief, although the changes could complicate succession planning.

Businesses: opportunities and challenges ahead

Business rates

Retail, hospitality, and leisure businesses will benefit from a 40% relief on business rates until 2026, offering some breathing room for sectors still recovering from COVID-19 and inflationary pressures. Beyond 2026, permanently lower rates for properties under £500,000 aim to support smaller businesses.

Corporate tax stability

The government’s Corporate Tax Roadmap provides some certainty, capping Corporation Tax at 25% for this parliament and maintaining the small profits rate and £1 million annual investment allowance. These measures may encourage long-term planning, but rising costs in other areas, such as NICs, could offset these benefits.

Support for innovation

The government’s continued commitment to R&D tax reliefs underlines its aim to support innovation. However, higher NICs and reduced capital allowances on some assets could deter businesses from reinvesting in growth or adopting new technologies.

What lies ahead?

The Autumn Budget 2024 presents a mix of opportunities and challenges. While some measures aim to support growth and provide stability, others will require businesses, families, and individuals to adapt their financial strategies. Whether you’re navigating higher taxes, planning your estate, or reassessing your business investments, understanding the implications is key.

Seeking expert advice will help you make informed decisions and maximise any available reliefs. By planning ahead, you can position yourself to manage these changes effectively and protect your financial future.

Prepare today to stay ahead tomorrow. For tailored advice and assistance, Get in touch

Keep an eye out on LinkedIn for our upcoming post-budget event, “Outlook for Buckinghamshire Businesses,” coming this January! Don’t miss the insights tailored to your business.