The annual budget announcement is a timely reminder for CFOs to closely monitor operating costs and stay vigilant about policy changes that could significantly impact their business.
The 2024 autumn budget has seen a few key changes that could impact businesses like yours. We’ll run through them below.
The autumn budget at a glance
1. Increase in the hourly National Living Wage.
From April 2025 the minimum wage will increase to help support the country’s lowest earners: This minimum wage will increase from:
- £6.40 to £7.55 for apprentices
- £8.60 to £10.00 for 18-20 year olds
- £11.44 to £12.21 for people over 21 years old
These increases will particularly affect sectors that employ a high proportion of low-wage employees, including retail and hospitality.
2. Increase in Employers’ National Insurance contributions.
- The minimum threshold for National Insurance contributions will fall from £9.1k to £5k
- National Insurance contributions themselves will rise from 13.8% to 15%
Some or all of this increase is due to be offset for eligible smaller businesses by an increase in Employment Allowance (the amount of employers’ income which can be reclaimed) from £5k to £10.5k.
3. Increase in Capital Gains Tax on the sale of second homes and investments (such as shares).
- Lower rate to increase from 10% to 18%
- Higher rate to increase from 20% to 24%
Lower and higher rates for residential properties will remain the same at 18% and 24% respectively.
4. Increase in Business Asset Disposal Relief in 2026.
The BADR rate will remain at 10% in 2024, increase to 14% in April 2025, and 18% from 2026.
5. Business rate relief
40% Business Rates relief for retail, hospitality and leisure sectors to remain in 2025-26 with £110k cap. the Small Business Multiplier freeze will continue, offering ongoing support for smaller enterprises facing increased operational costs.
6. Changes to Inheritance Tax
Inheritance Tax on the first £1m of combined disposal of Business and Agricultural assets will be IHT free. 50% relief to apply above that threshold, with an effective rate of 20%.
7. Corporation Tax freeze
The corporation tax rate will be frozen at 25% for the lifetime of the current government.
8. Abolition of non-domicile status
The non-domicile regime to be abolished from 6 April 2025 and replaced with a new residence scheme.
Why spend management is crucial for cash flow
Given the changes announced in the UK’s autumn 2024 budget, UK businesses will need to revisit their own budgets to ensure they have enough cash flow. Managing cash flow is critical for profitability and sustainability, and a lack of liquidity is one of the main reasons businesses find themselves in financial trouble or fail entirely.
In times where the cost of running a business is increasing, spend management becomes an essential financial safeguard, rather than just a cost-saving strategy.
By adopting clear spending policies and having a clear view of expenses at all times, businesses can maintain a healthier cash flow, reduce financial stress and better position themselves to weather economic fluctuations.
How Moss can help
At Moss we enable businesses to identify potential cash flow risks early, and make adjustments before issues grow. With smart spend management, corporate cards, and end-to-end accounts payable, our customers get full visibility and control over every aspect of their company spending.
Limit overspending with real-time control:
Moss empowers finance teams with complete spend control, efficiently handling both centralised and decentralised expenses. This ensures actual expenditure always aligns with approved budgets
Save time through the end-to-end automation of spend workflows
Moss enables finance teams to focus on strategic initiatives instead of spending hundreds of hours every month requesting receipts, categorising expenses, and correcting errors.
We digitise and automate every step of processing spend at scale, from document and approval collection, to pre-accounting, reconciliation and payment execution.
Minimise risk and increase financial stability
Ensure business continuity with a robust and reliable platform your users, vendors, and suppliers can trust.
Moss cards are accepted as standard globally and funds are safeguarded by global systemically important banks. We’re also regulated by Europe’s most stringent regulators, BaFin and the UK’s FCA, ensuring full compliance to support your business’s growth.
FAQs
Small businesses may experience higher payroll costs due to the increase in National Insurance contributions, but the expanded Employment Allowance from £5,000 to £10,500 could offset some of this rise for eligible businesses.
The new CGT rates (18% lower, 24% higher) on the sale of second homes and investments increase the tax burden on these transactions, affecting individuals and businesses with substantial investment holdings.
As operational costs increase due to changes in wages, taxes, and contributions, efficient spend management helps businesses control expenses, ensuring healthier cash flow and financial resilience.
The National Living Wage is the UK government-mandated minimum hourly wage for workers aged 21 and over. This rate is legally binding for employers and is reviewed annually to reflect the cost of living.
