Budget 2024

Ok, I wasn't going to post anything about the budget as every accountant on here will be doing the same old thing. We did send a mail shot to our clients within the hour of the budget speech and this is a reply from one-

"This email is awesome, So helpful and personalised. 10/10"

So if you are a startup, freelancers, or small business owner here is breakdown of the budget and what it meant for you.

With so much budget coverage in the news and on social media, it’s easy to get overwhelmed. But don’t worry—this newsletter won’t cover every little detail. Instead, I’m highlighting what matters most to you, my clients—startups, freelancers, and small business owners.

Let’s dive into the key points:

Tax Increases & Where It’s Going

The government plans to raise £40 billion in taxes, which will be used for investment in infrastructure and to modernise HMRC systems. Part of this is bringing in more compliance staff to recover unpaid tax. While the aim is investment, it also signals a tightening grip on tax recovery—something to keep in mind if you’ve got any loose ends with HMRC!

Minimum Wage Hike—Good for Workers, But What About You?

The minimum wage is set to rise to £12.20 per hour, with 18-20 year-olds seeing an increase to £10, and apprentices to £7.55. While this is a win for employees, it’s an extra cost for businesses like yours. Will this affect your hiring plans? Without any offsetting measures like business rate relief (which would help), the burden falls on business owners. Could this push you to consider freelancers or overseas talent? We’re seeing more of our clients exploring these options already.

Employment Law Updates—Extra Protections

There are new changes to employment law, with increased protections around unfair dismissals, maternity rights, and more. If you’re feeling uncertain, it’s best to consult an HR lawyer—we can introduce you to someone if needed.

No Big Surprises in Tax Rates… Mostly

The good news: no increases in National Insurance (NI), VAT, or Income Tax for employees. But there is a hit for employers. Employer’s NI will rise by 1.2% to 15% from April 2025, and the threshold for paying NI on employees drops from £9,100 to £5,000. This means higher taxes for you, while employee rates remain untouched.

The employer’s allowance will increase to £10,500, which helps, but not if you’re a sole director—it only applies if you’ve got staff. Could this change push you towards hiring freelancers or outsourcing?

Capital Gains & Entrepreneurs’ Relief

For those thinking of selling their businesses:

Capital Gains Tax rates are increasing: from 10% to 18% on the lower rate and from 20% to 24% on the higher rate.

Entrepreneurs’ Relief (now called Business Asset Disposal Relief) stays at 10% for the first £1 million but will rise to 14% next tax year. So, if you’re planning a sale, timing is everything.

Inheritance Tax Freeze

The inheritance tax-free threshold remains frozen at £320k until 2030, with a potential increase to £500k if passing your property to family.

Corporation Tax Stays the Same

Corporation tax will remain at 25% for this parliament—no changes here.

The Hiring Dilemma: To Hire or Not to Hire?

With rising costs, many of you might be wondering: Should I hire more employees, stick with freelancers, or look abroad for talent? The budget is pushing more of you towards the latter, and it’s a trend we’re already seeing across our client base.

What Didn’t Change (and That’s Good!)

No changes to R&D tax credits or investment allowances—a relief for startups. And SEIS/EIS schemes remain unchanged, which means continued incentives for investors in startups like yours.

A Few Final Thoughts

Overall, no major shocks with this budget—thanks to the leaks in the days leading up to it. The biggest hit for most of you is likely the employer’s NI increase, but the bump in the employer’s allowance will offset this for some. And if you’re a sole director, the increase doesn’t apply to you—so no change there.

There’s no mention of any new reliefs for businesses to balance out the rising costs. If you’re thinking of future-proofing your hiring strategy, now might be a good time to explore your options—freelancers, remote teams, and international talent are becoming increasingly attractive.

And for those thinking about moving overseas (after the summer we just had, who isn’t?), the non-dom scheme is being scrapped. We’ll be keeping an eye on what comes next—stay tuned for updates.

As always, feel free to get in touch if you need advice on navigating these changes. Whether it's HR introductions, tax planning, or guidance on your hiring strategy, we’re here to help.