A Frightfully Big Budget: The Triple Curse for SMEs
As October's shadows lengthen, Labour's first Autumn Budget has materialized with truly frightening implications for Britain's business owners. In what has been described as the most spine-chilling fiscal announcement in half a century, Chancellor Rachel Reeves has unveiled a £40 billion tax-raising specter that's set to haunt the economy for years to come.
Like a master of dark arts, the Chancellor has conjured up a triple curse for business owners: soaring employer contributions, capital gains reforms, and inheritance tax changes that could send shivers through family-owned enterprises.
1. The Employer's NICs Nightmare
What's Rising from the Grave:
Current tax position: 13.8% rate with £9,100 threshold
Coming Horror: 15% rate with £5,000 threshold (April 2025)
The Curse: Additional £900 per employee annually
Survival Guide:
Maximize the enhanced £10,500 Employment Allowance
Review compensation structures
Consider implementing salary sacrifice arrangements
Audit staffing needs and explore automation options
2. Capital Gains Tax: The Rate That Grew
The Terrifying Rise:
Lower rate: 10% → 18%
Higher rate: 20% → 24%
Annual allowance already slashed to £3,000
Defensive Measures:
Accelerate planned disposals before April 2025
Consider phased selling strategies
Explore tax-efficient investment wrappers
Review business exit strategies
3. Inheritance Tax: No Safe Haven
The New Rules:
Business/Agricultural Relief capped at £1 million
50% relief above threshold (20% effective rate)
Pension pots drawn into IHT net from 2027
Frozen nil rate band of £325,000 extended from 2028 to 2030
Planning Potions:
Review succession planning urgently
Consider lifetime gifting strategies
Explore AIM investments (maintaining 50% relief)
Structure pension arrangements before 2027
Surviving the Tax Terror
While these changes may seem frightening, remember that preparation is your best defense against fiscal frights. The implementation window provides valuable time to adapt and plan. Get in touch to navigate through these shadowy changes and emerge stronger on the other side.
