The 2024 Autumn Budget introduces significant changes that will directly affect businesses across the UK, sparking mixed reactions from industry leaders. Key measures include tax increases and regulatory changes designed to bolster public finances, but these come with potential consequences for employment and business operations.
Tax Increases and Costs
One of the most impactful changes for businesses is the rise in employers’ National Insurance contributions by 1.2 percentage points, coupled with a reduction in the threshold from £9,000 to £5,000. These measures are expected to increase payroll costs, potentially leading to wage adjustments, hiring freezes, or even job cuts in cost-sensitive sectors.
The abolition of the non-domicile tax regime by 2025 also introduces uncertainty for businesses reliant on international talent. Shifting to a residence-based tax system could deter foreign professionals from relocating to the UK, affecting industries like finance, technology, and consulting.
Sector-Specific Challenges
Capital gains tax reforms and the extension of inheritance tax to pensions may discourage investment in certain sectors, including real estate and wealth management. Retailers have also warned that higher operating costs, combined with new wage mandates such as the 6.7% increase in the National Minimum Wage, could lead to higher consumer prices and reduced profitability.
Opportunities for Investment
Despite the challenges, the budget allocates substantial funding to public services and infrastructure, which could benefit construction firms, healthcare providers, and education-related businesses. The £5 billion housing investment may also create opportunities for developers and suppliers in the construction industry.
While the budget aims to strengthen the economy, businesses must carefully evaluate these changes and adapt strategies to navigate the evolving fiscal landscape.
The 2024 Autumn Budget presents a challenging environment for businesses, with tax increases and regulatory changes that may affect costs, employment, and growth strategies. However, opportunities in public investment and infrastructure projects offer potential for sector-specific gains.
For tailored advice on how these changes may impact your business and guidance on navigating the new fiscal landscape, visit B&R Partners.
