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UK Autumn Budget 2024: What It Means For UK Businesses

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On October 30, 2024, the UK witnessed a historic moment as Rachel Reeves delivered her first Budget as Chancellor of the Exchequer, making her the first woman to hold this office since its inception in 1817. This Budget was notable not only for its symbolic significance but also for being the first set of fiscal announcements from a Labour government in over 14 years. The overarching themes? Increased public spending, substantial tax adjustments, and strategic measures aimed at revitalising the economy.


Key Budget Highlights Impacting Businesses


Reeves' Budget marked a clear shift toward enhancing public services and investment, with an additional estimated £70 billion in annual spending—equivalent to 2% of the GDP. This ambitious plan is to be funded by a blend of tax measures and government borrowing, with more than half of the increase sustained through heightened tax revenues.


1. Employer's National Insurance Contributions


One of the most impactful changes for businesses is the adjustment in employer's National Insurance contributions. This move alone is projected to raise an extra £25 billion per year. For employers, this translates to higher payroll expenses and necessitates careful financial planning to manage increased outflows.


2. Capital Gains and Business Asset Disposal Relief


Personal taxation saw significant shifts, with immediate increases in capital gains tax rates. Additionally, changes to the Business Asset Disposal Relief, effective from April 2025, may influence business sale strategies and succession planning.


3. Inheritance Tax Reforms


The Chancellor also introduced modifications to inheritance tax reliefs, targeting business assets, unquoted shares, agricultural property, unused pension funds, and death benefits. Importantly, existing thresholds will remain frozen until April 2028, influencing estate planning decisions for business owners.


What stayed the same?


Reassuringly, Reeves confirmed that VAT rates, income tax rates, and employee National Insurance contributions would remain untouched. Additionally, some of Labour’s pre-election promises were confirmed, such as:


•           Abolishing the remittance basis of taxation for non-domiciled individuals.

•           Adjusting the taxation of carried interest.

•           Applying VAT to private school fees.

•           Maintaining the Energy Profits Levy.

 

Corporate Tax Roadmap: What to expect


In a bid to provide businesses with greater predictability, the Chancellor unveiled the corporate tax roadmap. This roadmap assures that the current higher corporation tax rate will be capped at 25% and commits to maintaining full expensing—a relief that can stimulate investment by allowing businesses to deduct the full cost of qualifying assets from their taxable income.


How 4D Can Support Your Business in Navigating Post-Budget Challenges


The announcements in the 2024 Autumn Budget present both challenges and opportunities for UK businesses. At 4D Limited, we are equipped to help your business adapt and thrive in this evolving landscape:


1. Cybersecurity and Compliance: Supporting National Security Goals


As government policy evolves, so too does the need for fortified cybersecurity measures. 4D offers comprehensive solutions to help businesses meet stringent compliance standards, ensuring data integrity and supporting national security efforts.


2. Enabling Digital Transformation for SMEs


With new Budget measures acknowledging the essential role of SMEs in driving economic growth, there is an increased emphasis on supporting their digital evolution. 4D provides robust Managed Service Provider (MSP) support, offering tailored guidance for SMEs aiming to modernise their IT infrastructure, optimise operations, and enhance competitive advantage.


3. Elevating SME Security


The economic landscape necessitates that SMEs adopt a proactive approach to cybersecurity. 4D specialises in building resilient security frameworks that protect against threats, minimise risk, and safeguard business continuity.


Bottom Line:


While the 2024 Autumn Budget introduces financial strains in areas such as employer’s National Insurance and capital gains tax, it also lays out a blueprint for stability and growth, especially through enhanced public spending and investments. Businesses must remain agile and informed to navigate these shifts effectively.


4D Limited is here to be your trusted partner, ready to empower your business with the tools and support needed to succeed in a post-Budget economy. Reach out to us today to learn how we can support your digital transformation, bolster your cybersecurity, and ensure compliance amidst these significant fiscal changes.

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