For small and medium-sized enterprises (SMEs), the Autumn Budget provided only modest benefits.

Small businesses employing four or fewer employees with income above the minimum wage will be significantly affected by the increase in Employers’ National Insurance contributions. Mandatory higher wages for these workers will quickly be outweighed by gains from increased employment allowances.

Lower capital gains tax rates may provide some relief for small businesses planning closure. or for investors who wish to liquidate assets before the end of the tax year. Although a 40% business rates discount capped at £110,000 may seem beneficial. But it also means that many businesses will see their rates almost double, rather than quadrupling as previously expected without the extension.

The lack of income tax and National Insurance thresholds increased due to decisions of the previous government resulting in a de facto increase in taxes. This causes the actual income received to decrease amid rising costs. Although adjusting the personal tax cap to the rate of inflation in 2028-2019 is a positive step – timed conveniently with the upcoming election.  timing that coincides conveniently with an upcoming election campaign.

While some people may feel comfortable paying a fuel tax of 52.95p per liter. it’s important to note that this erection or reduction has been normal since 2011. If you look at it more optimistically the Budget indicates increased investment in various sectors. This may promote employment growth and create opportunities for small businesses and contractors. Even though budgets are seen as a burden on businesses. But it is important to realize that small organizations are largely protected. However, concerns about the lack of a coherent recovery strategy with long-term sustainable spending levels remain pressing. These issues will need to be examined carefully in the coming days and weeks.

Key Announcements

National Insurance

• Employers’ NI will increase from 1.2% to 15% from April 2025.
• The secondary limit has been reduced from £9,100 to £5,000.
• Employment allowance will increase from £5,000 to £10,500, meaning 865,000 people will not pay any National Insurance payments at all, effectively employing four people on minimum wage without requiring their employer to pay NI.

Capital Gains Tax

• The standard rate increased from 10% to 18%, with the higher rate increasing to 24%.
• BADR will remain on a lifetime allowance of £1,000,000.
• BADR is expected to remain at 10% until 5 April 2025, increasing to 14% from 6 April 2025 to 5 April 2026, then increasing to 18% from 6 April 2026…
• The capital gains tax rate will increase to 32% from April 2025. From April 2026, the government will provide additional reforms.

Inheritance Tax

The extension of the inheritance tax limit will be postponed for a further two years, until 2030, meaning the first £325,000 of an estate can be inherited tax-free. This increases to £500,000 if the estate includes accommodation provided for direct descendants.  Therefore, there is a £1m tax-free allowance when the estate passes to a surviving spouse or civil partner.

They will consolidate inheritance tax from April 2027 and reform agricultural property relief and commercial property relief. From April 2026, the first £1 million worth of farm joint venture land will not attract inheritance tax at all. But estates worth more than £1 million are subject to inheritance tax with a 50% discount to the effective rate of 20%, she said.

Business Rates

In April 2025, the government will replace the current 75% discount on business rates with a 40% discount, capped at a maximum of £110,000.

Income Tax

• There has been no extension of the income tax and NI thresholds beyond previous government decisions.
• From 2028-29, the personal tax limit will increase in line with inflation.
• The minimum wage and living wage will increase from April 2025 to £12.21.

Tobacco

• Tobacco tax escalator will renew at RPI +2%.
• Increase tax on rolled tobacco by 10%
• Introducing flat rate billing for all vaping liquids from 2026…
• Adding just one tobacco duty to maintain smokers’ incentive to quit

Fuel Duty

• Frozen again, at 52.95p per litre.

Alcohol Duty

• Draft Duty charged on drinks poured in a pub, will be cut by 1.7%
• Alcohol duty rates on non-draught products will increase in line with RPI from February next year.

Stamp Duty:

The government will increase land stamp duty fees on second homes from 2% to 5% tomorrow.

Windfall Tax:

• The wind tax on oil and gas profits will increase to 38% and expire in March 2030.
• The government should remove the 29% investment allocation to ensure the oil and gas industry can help preserve jobs and support the UK’s energy security.

Private school VAT:

As expected, VAT will be charged on private school fees from January 2025. The government will introduce legislation to remove private school relief from commercial rates from April 2025 onwards.

Education:

• The breakfast club should triple its investment.
• £2.3 billion in additional funding for teachers and £300 million for further education.
• £1.0 billion investment in special education
• £2.1 billion to upgrade school maintenance
• £1.4 billion to build 500 schools in “the greatest need”

Defense:

• The increase in the total MOD budget beyond its commitment to NATO is 2.9bn…
• £3 billion to Ukraine ‘As long as it lasts’
• Holocaust education charities will receive additional funding.

Policeman:

• Waiver of immunity for low-level shoplifting. Presented by a conservative group
• Additional training for police officers
• Creating a specific offense to harm a store employee

Devolved Governments:

The government will support public services across the UK, Scotland, Wales and Northern Ireland. The Budget provides the largest long-term funding commitment to a devolved government. Since they donated £3.4 billion to the Scottish Government to improve public services in Scotland, £1.7 billion to the Welsh Government and £1.5 billion will go to the Northern Ireland Executive.

Local Government:

Funding for local government will increase significantly next year. Greater Manchester and the West Midlands will be the first mayoral authority to achieve integrated housing next year. By giving the mayor “Meaningful control over funding in their local area”.

Space

£1 billion investment in infrastructure and buildings in the aerospace sector

Transportation

• £2 billion for the automotive sector
• Road maintenance will increase by £500 million next year to meet commitments to tackle an additional 1 million potholes each year.
• £650m of local transport funding for roads
• The bus travel limit is now £3, up from £2.
• Trans-Pennine Upgrade to connect York, Leeds, Huddersfield and Manchester “will provide local and regional electricity services between Manchester and Stalybridge by the end of this year…
• The government will provide an east-west rail link to drive development between Oxford, Milton Keynes and Cambridge.
• As part of the HS2 high speed rail project, they have provided funding to start tunneling work to London and Euston.

Government Investment

• Additional £100 billion of capital spending includes transport projects and GB Energy.
• The OBR said they expect this to increase GDP by 1.4% in the long term.
• Life Science Innovation Production Fund

Accommodation:

• £5 billion of housing investment
• Increase local housing supply
• The supply of affordable housing tends to increase.
• Reduce purchase rights discount
• However, local authorities retain receipts from social housing sales.

If you have any questions About your account caused by the budget Please don’t hesitate to contact your Account-Ease accountant.