What Does The Autumn Budget 2024 Mean For Business Owners?

Rachel Reeves has presented a historic Autumn Budget—the first Labour budget in 14 years and a landmark event, as it was delivered by the UK’s first female Chancellor of the Exchequer. Her budget promising measures aimed at restoring economic stability, increasing investment, and unlocking the potential of all UK regions.

With forecasts showing slow, but steady GDP growth, rising to 2.0% by 2025, Reeves describes this Budget as a plan to enhance the economy's supply capacity, fostering sustainable growth and increased productivity by raising £40bn.

However, what does the budget mean for business owners?

Millbrook Business Finance summarises the key elements of the Autumn Budget 2024, highlighting the opportunities and challenges within this new fiscal framework for business owners and offering solutions to support businesses as they adapt.

Key Budget Announcements and Their Impact on Business

1. Increase in Employers’ National Insurance Contributions

The headline Budget change, and one creating the most debate, is for the increase in Employer's National Insurance contributions from 13.8% to 15%, coupled with a reduction in the threshold at which contributions begin, from £9,100 to £5,000.

These changes affect all sectors but will particularly impact businesses with larger workforces, such as retail, hospitality, and manufacturing, where staffing costs are already significant. The lowered threshold will increase costs for every employee, not just higher earners, adding financial pressure across all levels of the workforce.

However, the Employment Allowance which allows companies to reduce their NI liability is to increase from £5,000 to £10,500, easing pressures on smaller businesses and fostering longer-term growth.

For business owners, this could mean re-evaluating hiring strategies, as each new employee could bring a higher tax burden. However, companies are urged to explore how their business will be uniquely impacted by these changes.

What Millbrook's experts have to say...

“The increase in employer National Insurance contributions, alongside other payroll costs, creates an added financial burden on businesses. This change impacts bottom lines across sectors, especially for those reliant on larger workforces, like manufacturing and hospitality. At Millbrook Business Finance, we understand the pressures that these rising costs place on business operations. Our financing solutions are designed to provide the liquidity needed to help businesses adapt smoothly, covering wage-related expenses and ensuring continuity without compromising growth.” — Justin Amos, Managing Director

"Although the budget brings change, it also offers a more stable landscape for small businesses, emphasising predictability in National Insurance contributions, minimum wages, and other taxes. By boosting the Employment Allowance to £10,500, the government is providing relief to 85,000 of the smaller businesses, allowing them to focus on growth and reinvest in their operations. Along with corporation tax will remaining capped for the duration of this parliament, it gives small businesses a clearer picture of their future obligations, fostering an environment where they can make confident hiring and investment decisions." -- Charles Pritchard, Director of Operations

2. National Minimum Wage Increase by 6.7%

The budget’s 6.7% rise in the National Living Wage, from £11.44 to £12.21 per hour for workers aged 21 and older, sets a new benchmark for wages.

Additionally, the National Minimum Wage for younger workers aged 18-20 will increase from £8.60 to £10, while apprentices will see an hourly wage boost from £6.40 to £7.55.

For business owners, especially in the retail, leisure and hospitality, and services sectors, this change represents a notable shift in payroll costs. While the increase aims to improve workers’ standards of living and support retention, businesses operating on tight margins may struggle to absorb the added expense, jeopardising profitability.

For small and medium-sized enterprises (SMEs), these rising costs could necessitate adjustments in staffing levels, pricing, or internal budgeting to balance the higher wage burden. However, the wage increase may also boost employee morale and retention, potentially reducing turnover costs over the long term.

3. Freeze on Fuel Duty

The current rate of 52.95p a litre will continue for the 2025/26 financial year, with Rachel Reeves assuring: “There will be no higher taxes at the petrol pumps next year.”

Transport and logistics, delivery services, and trades that require travel will benefit most, as this freeze keeps fuel costs predictable amid broader economic pressures.

While Reeves emphasised that an increase would have placed an undue burden on businesses and working people alike, the freeze’s impact is primarily stabilising, rather than reducing, expenses in the long term. Fuel-intensive industries like transportation and distribution will find this particularly beneficial for maintaining stable pricing on deliveries and services.

However, as fuel remains a volatile expense due to world events, businesses should still consider ways to mitigate future risks, such as fleet efficiency strategies.

4. No Increase to Employee National Insurance, Income Tax, or VAT

Maintaining current levels for Employee National Insurance, Income Tax, and VAT offers a degree of stability for business owners and workers alike.

This decision provides consistency for budgeting, especially in industries with significant payroll commitments or heavy turnover. Stability in these taxes means that business owners can plan with fewer concerns about immediate increases in tax obligations. However, other tax changes within the budget may offset these benefits, impacting cash flow.

The maintenance of these rates does provide indirect relief, allowing businesses to continue focusing on growth and operations without the need to factor in sudden tax hikes, which is particularly helpful for long-term projects and forecasting.

5. Increase in Capital Gains Tax (CGT)

Changes in Capital Gains Tax (CGT) thresholds and rates are likely to affect business owners contemplating asset sales or divestments.

Basic rate capital gains tax on profits from selling shares to increase from from 10% to 18%, with the higher rate rising from 20% to 24%. For sectors heavily reliant on asset investments, like real estate, finance, and technology, the higher CGT could deter sales and reduce liquidity, as owners weigh the benefits of retaining assets against tax costs.

Small business owners planning to sell their companies as a part of retirement or exit strategies may find this increase particularly challenging, as it reduces the net proceeds they retain post-tax. This change may also impact businesses in sectors where asset value appreciation is significant, such as property development or high-growth tech.

6. Increase in Duty on Alcohol, Tobacco, and Vape Liquids

A 1p cut in duty on draft alcohol has been well-received in the hospitality sector, providing relief for pubs and restaurants where draft beer sales are central, encouraging consumer spending on draft products, potentially increasing foot traffic and revenue for pubs, bars, and other licensed establishments.

The increase in duty on non-draught alcohol products (in line with RPI) may shift consumer preferences towards on-premise consumption. For business owners in hospitality, this duty cut allows for competitive pricing on draft offerings, which could attract more customers. However, it may also necessitate adjustments for retailers focused on non-draught alcohol products, particularly in the off-license retail space as spirit duty will increase.

Additionally, alcohol duty rates on non-draught products will increase in line with RPI from February 2024. For small retailers, pubs, and convenience stores that rely on tobacco and vaping products for a significant share of revenue, these duty hikes may reduce demand, pushing consumers to reconsider or limit their purchases.

While the duty increases align with public health objectives, for business owners, it may necessitate pricing adjustments, potentially impacting customer loyalty. Retailers may consider diversifying product offerings to lessen the dependency on these high-duty items, while hospitality businesses might increase their focus on draught sales, where rates remain lower.

What Millbrook's experts have to say...

“The Autumn Budget brings both opportunities and significant challenges to a wide range of sectors, from retail and hospitality to logistics. Businesses may find themselves facing higher wage bills and increased duty costs, which can strain cash flow and profitability. At Millbrook, we’re here to support clients with a range of services—from short-term cash flow support to tailored long-term strategic financing—enabling them to manage these new expenses and maintain resilience through financial turbulence.” — Ray McAuley, Senior Business Finance Specialist

7. Support for Electric Vehicles (EVs)

Labour’s budget includes sustained incentives for electric vehicle (EV) adoption in company car tax, now extended until 2028, along with a more substantial tax differential between EVs and other vehicles from April 2025.

For sectors heavily reliant on fleet vehicles, such as logistics, delivery, and field services, this support presents an opportunity to reduce future tax burdens by transitioning to electric vehicles. Although this differential favours businesses with the capacity to invest in EVs now, smaller companies may find the initial cost of EV infrastructure challenging.

However, as more EV options enter the market and charging infrastructure expands, businesses can look forward to long-term savings in fuel and vehicle tax costs. This incentive could also benefit businesses focusing on sustainability, allowing them to align transportation with their environmental commitments.

8. Oil and Gas Industry Support

The budget’s provisions to protect jobs in the oil and gas sector reflect an ongoing balance between supporting traditional energy sectors and advancing green transition initiatives. Sectors closely tied to oil and gas, such as engineering, manufacturing, and logistics, stand to benefit from job stability and the continuity of supply lines.

However, with the global push towards green energy, businesses in these sectors may face future shifts as the government incentivises cleaner energy alternatives. While this budget measure maintains stability for the immediate term, business owners in oil and gas-adjacent fields may consider diversifying energy sources and exploring renewable alternatives to future-proof their operations against eventual industry changes.

9. Increase in Stamp Duty on Second Homes

The increase in Stamp Duty from 3% to 5% on second homes introduces higher costs for businesses in property development, real estate, and those investing in secondary properties as part of their financial strategy.

This adjustment is likely to impact cash flow and ROI projections, particularly affecting smaller investors and businesses with limited capital. For those heavily invested in property portfolios, the added costs could delay project timelines, reduce profitability, or require adjustments in investment approaches. However, with tailored financing solutions, businesses can offset these increased expenses to maintain project momentum.

How Businesses Can Navigate Change

In response to these changes, Millbrook Business Finance is ready to support businesses with tailored business finance solutions:

Short-term Cash Flow Support

Wage increases, tax hikes, and duty escalators may put pressure on cash flow. Millbrook offers financing solutions to help businesses bridge these gaps and maintain stability.

Investment in Growth

For businesses looking to capitalise on electric vehicle incentives or invest in other tax-efficient strategies, Millbrook provides loans and guidance to support long-term growth without compromising liquidity.

Strategic Financing

Navigating these tax adjustments requires informed decision-making. Our team offers advisory services to help business owners develop tax-efficient strategies and plan workforce investments that align with their goals.

At Millbrook Business Finance, we’re committed to helping businesses navigate the changes introduced in this year’s Autumn Budget. From managing increased payroll expenses and cash flow needs to strategic finance solutions tailored to your unique sector challenges, our experts are here to support you every step of the way.

Reach out to us today at 0333 015 3301 to discuss how we can help your business adapt, grow, and thrive in the evolving economic landscape.