Last week’s budget posed significant challenges for businesses and business owners. What are the impacts, and how can they best respond?
The increase in employers’ national insurance contributions from 13.8% to 15%, along with the reduction in the employers’ NIC threshold from £9,100 to £5,000, is projected to cost UK businesses £25bn per annum. The effect of this, together with the increase in the National Living Wage by 6.7% to £12.21 in April 2025, will significantly increase the cost of employing staff for all businesses across the UK.
The Capital Gains Tax (CGT) rate for Business Asset Disposal Relief will increase from 10% to 14% from April 2025 and then to 18% in April 2026. This will increase the tax bill for those selling their business by £80,000 on the first £1 million of any gain. For higher-rate taxpayers, the CGT rate increase from 20% to 24% has already taken effect, meaning an extra £40,000 in tax per £1 million of gain above the first £1 million.
How can business owners best manage these impacts? Firstly, if a business sale is on the horizon, there are clear advantages to completing the transaction before 6 April 2025. Secondly, now more than ever, every business should focus on maximising growth opportunities, driving margin, and optimising efficiency.
Deploying new strategies and innovative thinking across areas like M&A, technology, digital marketing, business systems, funding and capital structure, leadership & development, and strategic business planning will be crucial.
SWG Advisory is here to support businesses in Norfolk in tackling these challenges and maximising their opportunities.
Driving long-term sustainable growth is the best response. Get in touch today.
SWG Capital 