Autumn Budget for businesses –  what to expect and how to prepare 

The government has pledged to deliver economic stability with tough spending rules to grow the UK economy.

A pledge welcomed by many SMEs following, what is now years of uncertainty. To do this, it is imperative that the government demonstrates in this Budget, that it understands the needs of businesses  

The Prime Minister has warned that 30 October’s budget is set to be “painful”. Normally in the autumn we receive a statement, but it is interesting to note that it is being described as a Budget rather, suggesting that there are likely to be some big changes on the horizon.  It may also signal a permanent shift from a Spring to Autumn Budget.  

Following the Budget, we will be holding a webinar on 1 November at 9:30am where we will have a panel of tax and business experts prepped and ready to answer any questions you may have and provide their insights on any announcements.

You can register your place here.

So, what might be in October’s Budget? 

 What we know already about the Autumn Budget

• VAT will be introduced on private school fees from 1 January 2025 
• The government plans to further tighten the rules for UK resident but non-UK domiciled individuals , 
• It plans to change the rules for ‘carried interests’ for private equity.   
• The Full Capital Expensing scheme is set to be made permanent.  

The government plans to tackle the tax gap by tackling avoidance and strengthening HMRC’s powers, but this is something we hear from every government, irrespective of their politics.    

In line with the Labour party election manifesto it is not expected there will be any increase to Income Tax, National Insurance or VAT, and Corporation Tax will not be higher than 25%.   

What we don’t know

The government have identified a £22bn ‘black hole’ in the public finances and have confirmed they will need to increase tax revenues, in addition to the reduction or deferral of expenditure which has been announced.  Knowing what won’t change, how might the government raise the money needed?  

The manifesto was silent on Capital Gains Tax, Inheritance Tax and taxation of pensions and relief on pension contributions, together with other more minor taxes.  The tax raised from Capital Gains Tax and Inheritance Tax is relatively modest in the context of the overall tax take, but the cost of tax relief on personal pension contributions is very significant.   

How will the government balance the need to raise money with their stated desire of growing the economy, and the need for individuals to provide for their own retirements, and not relying so heavily on the state?  Could an increase to Capital Gains Tax, with no relief for business owners and risk takers who would deliver growth in the private sector, stifle the growth that is needed in our economy? 

The answer to many of these questions is we will have to wait and see. UK SMEs have shown great resilience over the past few years and now need some consistency and certainty.  Business owners should expect a number of changes that could affect their business and we will be able to advise the best way to navigate these changes. 

Join us on Friday 1 November and ask our panel of tax and business experts your questions following the Budget announcement on our webinar, register your place here.