Autumn Budget 2024: What Struggling UK Businesses Need to Know

From April 2025, employer NICs will increase by 1.2 percentage points to 15%, while the employee threshold is reduced to £5,000, affecting many small and medium-sized businesses already battling high wage bills.

For struggling companies, this may strain cash flow further and necessitate a review of payroll strategies. 

To alleviate this burden, the government has increased the Employment Allowance from £5,000 to £10,500 and removed the £100,000 eligibility threshold, meaning that 865,000 employers will pay no NICs next year.

For businesses with tight budgets, these savings could offer a crucial lifeline to manage workforce costs more effectively. 

Struggling businesses contemplating selling assets or restructuring may face higher costs, as the CGT rate rises from 10% to 18% for the lower rate and from 20% to 24% for the higher rate.

These changes, taking effect from 6 April 2025, could create cash flow pressures for those needing to sell assets to manage debts. 

The government has allowed a gradual increase for Business Asset Disposal Relief and Investors’ Relief, with full changes taking effect by 2026.

This phased approach gives businesses time to adjust their strategies and consider alternative financing or asset management options. 

In a positive step for sectors hit hardest by rising costs, such as retail, hospitality, and leisure, the government will permanently lower business rates multipliers starting in 2026-27.

In the meantime, small businesses will receive relief on business rates with a freeze on the small business multiplier and 40% relief for qualifying properties, capped at £110,000.

This support is aimed at helping struggling businesses manage occupancy costs, especially those relying on high street and in-person traffic. 

With these measures, businesses can focus on revitalising customer engagement without as much pressure from overhead costs, creating room to stabilise their operations. 

The budget caps Corporation Tax at 25%, making it the lowest rate in the G7, providing much-needed stability for businesses planning their financial futures.

For struggling businesses, this offers reassurance that their tax burden will not further increase, allowing them to focus on growth or recovery. 

The commitment to public investment—£100 billion over the next five years, with targeted spending on transport, housing, and research & development (R&D)—could provide an indirect boost by enhancing infrastructure and encouraging private sector investment.

Businesses that align with these priority areas may find new avenues to expand or attract customers, despite tight budgets. 

Recognising the ongoing struggles within the hospitality sector, the government is cutting draught product duty by one penny per pint, effective from February 2025.

Additionally, it is removing the duty stamp requirement for spirits, benefiting smaller distilleries like those in the Scotch Whisky industry. 

These targeted reductions aim to ease cost pressures for pubs and breweries, which have faced steep operational costs.

For struggling businesses in this sector, even these small reliefs could make a difference in staying afloat, especially as consumer spending on hospitality remains constrained. 

In an effort to close the tax gap, the government is increasing its compliance efforts, targeting £6.5 billion annually by 2029-30.

This could add administrative requirements for businesses already stretched thin.

Struggling companies should ensure compliance with these regulations, as penalties or audits could add further financial strain. 

Simplified compliance systems, however, may also create more streamlined processes in the long term, potentially easing the administrative burden on smaller companies with limited resources. 

For struggling businesses exploring greener operations, the budget’s expanded EV incentives and 100% First Year Allowances for EV charge points offer potential savings.

These measures could be an opportunity for businesses to reduce long-term operational costs and improve sustainability, especially as customer demand for green practices grows. 

For businesses already facing financial instability, the Autumn Budget 2024 offers a mix of challenges and support.

While increased NICs and CGT could place additional strain on cash flow, businesses should actively explore how new allowances, reliefs, and investment incentives might offset these costs.

Leveraging employment and business rates relief, along with investment in green initiatives, can help struggling businesses navigate these fiscal changes more effectively. 

Struggling businesses are encouraged to plan ahead for the NIC increases and CGT changes by reviewing cost structures and cash flow strategies.

Consider whether the Employment Allowance could reduce payroll costs or if your business qualifies for sector-specific reliefs.

For those impacted by tighter cash flows, exploring financing options or partnerships aligned with government priority areas, like green technology or R&D, could offer resilience. 

The Autumn Budget 2024 underscores the need for businesses to stay agile and well-prepared.

By planning ahead and tapping into available support, struggling UK businesses can manage these new fiscal realities while positioning themselves for recovery and growth. 

For free advice and support contact Business Helpline today.