2024 Budget Results For Businesses

[Paul Kelly ICHYB]

This is what I picked up:

• The national minimum wage will rise in April 2025 to £12.21 per hour
• Crackdown on umbrella companies and promoters of tax avoidance schemes
• Fuel duty - frozen
• Employers' NIC increases by 1.2% to 15% from April 2025.
• Employers' NIC threshold decreased at which NIC becomes payable will fall to £5,000 (from £9,100).
• Employment Allowance to increase to £10,100 from £5,000
• Capital Gains Tax - lower rate increase from 10% to 18% and higher rate from 20% to 24%.
• £1m Business Asset Disposal Relief to be retained
• EIS kept
• Business rates - existing 40% (75% already planned to stop early 2025) on business rates for the retail, hospitality and leisure industries will continue in 2025/6 (capped at £110,000 per business).
• Corporate Tax to be kept at 25%
• VAT on private education from January 2025 and business rates relief to be removed

HAve I missed/mis interpreted something?

 

[Ozzy]

The only real surprise to me was the very welcome freeze on fuel duty, the haulage industry is already battered enough so that was a welcome surprise. Everything else wasn't really a surprise to be honest.

I half expected, although would argue would have been a stupid move, the removal of the BADR allowance. So it's good that remained

 

[Newchodge]

Crackdown on umbrella companies and promoters of tax avoidance schemes

I missed that one. About time!

 

[Ozzy]

I must admit I'm a bit p'd off that my private jet charter flights are going to be taxed at a higher rate than the riff raff budget airlines.

 

[Casabian]

Single director companies don't qualify for Employers Allowance, so the ER NI threshold dropping to 5,000 will affect us.

Didn't catch anything about dividend tax... anyone know if that's changing?

 

[UKSBD]

The AI Budget.
More incentive to replace employees with Bots

 

[Newchodge]

Single director companies don't qualify for Employers Allowance, so the ER NI threshold dropping to 5,000 will affect us.

Didn't catch anything about dividend tax... anyone know if that's changing?

I wonder if there will be an increase in single director companies emplying, for example, their payroll provider for a week, rather than paying them monthly for the work they do? That would qualify them for Employers Allowance.

 

[UKSBD]

I wonder if there will be an increase in single director companies emplying, for example, their payroll provider for a week, rather than paying them monthly for the work they do? That would qualify them for Employers Allowance.

Does the 2nd employee have to earn above the minimum NI contribution rate to get EA?

 

[Paul Kelly ICHYB]

Didn't catch anything about dividend tax

I may have missed that, but a quick Google doesn't show anyone mentioning it!

If I am wrong, I will add/correct the list.

 

[Newchodge]

Does the 2nd employee have to earn above the minimum NI contribution rate to get EA?

Yes, but only for one pay reference period. If the company has any ER NI contribution to pay for a non-director, they get the allowance.

One of my single director companies employed her husband for a few hours every month. Then paid him once a year. OK, a technical breach of NMW, but he was not going to complain.

 

[Paul Kelly ICHYB]

I am hearing a lot of push back re the flat NMW. Costs for younger people are no less than for an older person, so why was it always lower? I think that this is a good thing.

The bottom line is some prices will be driven up by many of these changes and that will have an impact on inflation!

 

[UKSBD]

Yes, but only for one pay reference period. If the company has any ER NI contribution to pay for a non-director, they get the allowance.

One of my single director companies employed her husband for a few hours every month. Then paid him once a year. OK, a technical breach of NMW, but he was not going to complain.

How much do they have to pay in a pay reference period?

 

[N-UPS]

Raising 70 billion in tax increases and re-defining what loans are (sounds like BS).
I think there was a 20 billion shortfall.
What is the rest going on?

I hope they hammer the umbrella / NoneDom fraudies, getting some value out of the self proclaimed unemployable.

They should also be ravaging the fraudulent bounce back loaners.

 

[Clinton]

What's not been covered in any of the news, possibly because she didn't mention it in the budget speech, is about BADR (Entrepreneurs Relief).

So I'll update UKBF as this is an area of interest for me and there's some small print in the actual budget document published online.

BADR, the concessionary CGT rate of 10% that some business owners can avail of when selling their businesses, goes up.

From 6 April next year, it's 14%. It goes up again a year later to 18%.

 

[zomex]

Not as bad as I was expecting but that Capital Gains Tax from 10% to 18% is gonna be painful.

 

[Newchodge]

How much do they have to pay in a pay reference period?

Weekly, 175.01
Monthly 758.01
But that's for this year. Next year the threshold will drop from 9100 per year to 5000 per year, so it would be nearly half that.

 

[N-UPS]

Paul wrote "

• £1m Business Asset Disposal Relief to be retained"

Clinton wrote that its rate is dramatically increasing.

Seems like a headline that does not do what it says on the tin. Should say "BADR to be retained, but massively changed"

 

[Duke Fame]

I must admit I'm a bit p'd off that my private jet charter flights are going to be taxed at a higher rate than the riff raff budget airlines.

That appeared to be the most ideological decisions

 

[Newchodge]

Paul wrote "

• £1m Business Asset Disposal Relief to be retained"

Clinton wrote that its rate is dramatically increasing.

Seems like a headline that does not do what it says on the tin. Should say "BADR to be retained, but massively changed"

I heard her say it was being retianed, I didn't hear her say the rate was increasing.

 

[Ozzy]

I heard her say it was being retianed, I didn't hear her say the rate was increasing.

Yeah it is increasing as @Clinton mentioned above; that caught my ears

 

[UKSBD]

Weekly, 175.01
Monthly 758.01
But that's for this year. Next year the threshold will drop from 9100 per year to 5000 per year, so it would be nearly half that.

Using current figures in this example.

My company currently pays my wife £750 a month
Do your figures above mean we aren't really eligible for EA or is there an annual figure too?

In not eligible, would increasing her wage to £760 for just 1 month make the company eligible?

 

[Newchodge]

Using current figures in this example.

My company currently pays my wife £750 a month
Do your figures above mean we aren't really eligible for EA or is there an annual figure too?

In not eligible, would increasing her wage to £760 for just 1 month make the company eligible?

If employers' NI would be payable on the wage (if employer's allowance did not apply) then 1 pay period when employer's NI is payable makes the company eligible. 750 is too low. There is no annual figure as NI is not cumulative. Unless the employee gets paid annually.

 

[UKSBD]

If employers' NI would be payable on the wage (if employer's allowance did not apply) then 1 pay period when employer's NI is payable makes the company eligible. 750 is too low. There is no annual figure as NI is not cumulative. Unless the employee gets paid annually.

Thanks, so upping her wage to £760 for one month would be a sensible option, or better still just up it to £760 a month for the rest of the year just to be safe?

 

[Newchodge]

Thanks, so upping her wage to £760 for one month would be a sensible option, or better still just up it to £760 a month for the rest of the year just to be safe?

That would do.

Or use a professional payroll provider who would have told you this some time ago.

 

[UKSBD]

Just to add,
We don't actually claim any EA at the moment as I only pay myself £750 too.
But next year we will have to start claiming the EA

EDIT: or does £750 take us over the threshold?
Edit again: just checked, and we are just under

 

[BubbaWY]

1p off the duty on a draft pint. Read the comments of a pub landlord on X, who said that hes still going to have to put the price of a pint up 30p due to other increases (not from the budget) such as inflation, etc. So the pub trade hasnt really been helped out by the 1p cut.

 

[Ozzy]

I'm receiving all sorts of doom-and-gloom press releases in the UKBF mailbox from media companies, along with statements from their clients and comments like 'entrepreneurs set to leave the UK' and such.
It's always the same after every budget, yet business owners always roll up their sleeves and get on with business. The scaremongering and clickbait headlines really wind me up.

 

[BubbaWY]

I'm receiving all sorts of doom-and-gloom press releases in the UKBF mailbox from media companies, along with statements from their clients and comments like 'entrepreneurs set to leave the UK' and such.
It's always the same after every budget, yet business owners always roll up their sleeves and get on with business. The scaremongering and clickbait headlines really wind me up.

The problem is there is too much tribalism in politics. Labour supporting businesses will support the budget; Tory supporting businesses will slam the budget. Its hard to actually get a true reflection of whether its a good or bad budget.

 

[MikeJ]

The only real surprise to me was the very welcome freeze on fuel duty, the haulage industry is already battered enough so that was a welcome surprise. Everything else wasn't really a surprise to be honest.

I half expected, although would argue would have been a stupid move, the removal of the BADR allowance. So it's good that remained

Petrol is down about 60p from its peak. Putting it up 5p would raise billions. They could use that to reverse the 50% increase in the cap on bus fares.

While I was grateful for BADR when we sold, I don't think anyone starts a business in order to benefit from a low tax rate when the sell.

 

[Paul Kelly ICHYB]

business owners always roll up their sleeves and get on with business.

Exactly

 

[Paul Kelly ICHYB]

Petrol is down about 60p from its peak. Putting it up 5p would raise billions. They could use that to reverse the 50% increase in the cap on bus fares.

Being a NIMBY, why should I, as a driver, be supporting bus users, especially when my local buses are well below the £2 level!

 

[Duke Fame]

I am hearing a lot of push back re the flat NMW. Costs for younger people are no less than for an older person, so why was it always lower? I think that this is a good thing.

The bottom line is some prices will be driven up by many of these changes and that will have an impact on inflation!

Costs for younger people are no less than an older person? Really? living with parents, 1st job & few commitments.

Younger people are more of a risk to employ, they rarely have the skills (not just work etc but people skills etc that you learn). Ultimately, we employ people because they can add value and the value they need to add has to exceed the cost of employment. If a youngster cost the same as someone experiences, they have to deliver the goods or they get sacked rather quickly.

 

[Paul Kelly ICHYB]

I know some 20 year olds that are married with kids.

Not all of them live at home.

I never said that a youngster without experience should cost the same, however, why would a 50 year old without experience be worth more when filling shelves, waiting a cafe or labouring?

 

[Duke Fame]

Petrol is down about 60p from its peak. Putting it up 5p would raise billions. They could use that to reverse the 50% increase in the cap on bus fares.

While I was grateful for BADR when we sold, I don't think anyone starts a business in order to benefit from a low tax rate when the sell.

55% of fuel costs are tax at the minute, why would you want to tax people more?

Businesses don’t work all hours to build their business to give the profit to the govt, taxing means fewer would bother starting a business in the first place.

 

[Scalloway]

Being a NIMBY, why should I, as a driver, be supporting bus users, especially when my local buses are well below the £2 level!

Because when more people use the bus there are fewer cars on the road to hold you up.

 

[Duke Fame]

I know some 20 year olds that are married with kids.

Not all of them live at home.

Which is fine, it's up to individuals to earn enough to meet their lifestyle choices, it's not for businesses to be obliged to pay.

I never said that a youngster without experience should cost the same, however, why would a 50 year old without experience be worth more when filling shelves, waiting a cafe or labouring?

As we know, businesses are pretty quick to reward great people and if a 17 yo can really deliver, we'll do everything to keep them. The reality is in say a restaurant, a 17 years old waiter is unlikely to be as engaging with customers than a 30 yo etc and if the cost was the same, we'd choose a 30 yo over a 17 yo every time

 

[Duke Fame]

The problem is there is too much tribalism in politics. Labour supporting businesses will support the budget; Tory supporting businesses will slam the budget. Its hard to actually get a true reflection of whether its a good or bad budget.

There aren't many labour supporting business people. That is part of the problem with this Labour govt, there are none on the front bench with any business experience and even the business secretary hasn't run a business.

They really don't understand businesses and really really don't understand small businesses.

 

[Paul Kelly ICHYB]

The bus ticket cap and hospitality business rates relief are COVID hangovers - should we be looking at these being cancelled altogether?

Being on the fringes of hospitality, I understand the extreme issues they had during COVID, but is 4 years of special treatment with rates too much? Many other high street businesses are struggling and do not get this treatment!

 

[Duke Fame]

Because when more people use the bus there are fewer cars on the road to hold you up.

That was the thing about the ULEZ, Kahn managed to keep all the poor people out of the city and those who did get in, he made them use the most polluted part of city so they died quicker...genius

 

[BubbaWY]

There aren't many labour supporting business people. That is part of the problem with this Labour govt, there are none on the front bench with any business experience and even the business secretary hasn't run a business.

They really don't understand businesses and really really don't understand small businesses.

One of the most galling parts of the budget was the cheering from the Labour backbenches. Many of whom wont have ever run their own business and not have had any clue on how the budget measures will effect businesses. I know my local MP left uni, worked for a Union and then became an MP. What clue has he got about anything? (I appreciate it would be the same under a Tory budget).