Autumn Budget 2024: What small business owners need to know

Chancellor Rachel Reeves has announced her 2024 Autumn Budget, to which a panel of small business owners and experts reacted live.

Here's are the announcements relevant to small business owners.

Scroll to the end for Enterprise Nation founder Emma Jones' reaction, and read the reaction of entrepreneurs from Enterprise Nation community here.

Employers' National Insurance

From April 2025, Employers' National Insurance contributions will increase by 1.2 percentage points to 15%.

The secondary threshold, the point at which employers start paying National Insurance on a worker's salary, will be cut from £9,100 a year to £5,000.

Of the total £40bn in tax hikes announced in the Budget, this change is worth £25bn to the Treasury.

Employment Allowance

In a move designed to protect the smallest employers from the National Insurance rise, the Employment Allowance will increase from £5,000 to £10,500 which the chancellor says means 865,000 small businesses won't pay National Insurance.

Business Asset Disposal Relief

Business Asset Disposal Relief (BADR), the Capital Gains Tax relief entrepreneurs get when they sell their business, will increase from 10% to 14% in 2025 and then to 18% in 2026.

The higher rate of Capital Gains Tax (CGT) will rise from 18% to 24%. CGT on the sale of residential property will also increase from 18% to 24%.

Read government guidance to the Capital Gains Tax changes here.

Corporation Tax

Alongside the Budget, the government has published a Corporation Tax 'roadmap' which sets out the government's plans.

The government said the main commitments include:

• capping the headline rate of Corporation Tax at 25% for the duration of parliament.

• retaining the small profits rate and marginal relief at current rates and thresholds.

• maintaining the capital allowances system, including permanent full expensing and the £1m annual investment allowance.

• maintaining R&D reliefs.

• working collaboratively with companies on simplification and improving user experience, including HMRC's path forward on digitisation.

• developing a new process for increasing the tax certainty available in advance for major investments.

HM Revenue & Customs (HMRC) reform

The government said it is investing in improving HMRC's customer services, including answering 85% of phone calls where customers want to speak to an advisor.

It said it will "transform HMRC into a digital-first organisation, with a "digital transformation roadmap" to be published in spring 2025.

The government said it is also "investing to enable the modernisation and reform of HMRC, improving the productivity and resilience of HMRC's internal systems and improvements to the way customers engage HMRC, including through the HMRC App".

Tax thresholds

From April 2028, personal tax thresholds, which are the point at which people pay tax, will increase in line with inflation.

Inheritance tax

The inheritance tax threshold freeze will be extended until 2030.

However, from April 2027, inherited pension pots will be subject to inheritance tax, and from April 2026 agricultural property relief (APR) and business property relief (BPR) will be reformed.

For the latter relief, the first £1m of combined business and agricultural assets will continue to not be subject to inheritance tax.

For assets over £1m, inheritance tax will apply with 50% relief. Read government guidance here.

Alcohol duty

Alcohol duty on draught products will be reduced from February 2025, with a cut of 1 penny per average strength pint. Alcohol duty on non-draught products will increase in line with the retail price index (RPI) inflation from the same date.

Mandatory duty stamps for spirits will be removed and investment will be increased for spirits producers in the Spirit Drinks Verification Scheme, which allows producers to verify the geographic origin of their products.

Business rates

From 2026-27, the government will introduce "permanently lower" business rates for retail, hospitality and leisure (RHL) properties in England. The government said this change "will be funded sustainably by introducing a higher multiplier for the most valuable properties, including distribution warehouses used by online giants".

For 2025-26, 250,000 RHL properties will receive 40% relief on their bills, up to a cash cap of £110,000 per business. This a cut to the current 75% relief.

For 2025-26, the small business multiplier will be frozen.

The Labour Party has previously committed to scrap and replace business rates with a "fairer system". Alongside the Budget, the government published a "discussion paper" which sets "the direction of travel for transforming the business rates system and inviting industry to a dialogue about future reforms".

Retail crime

To help deal with the rise in shoplifting, the chancellor said the government will "scrap the effective immunity for low-value shoplifting".

Additional funding will also be provided to "crack down on the organised gangs which target retailers and to provide more training to our police officers and retailers to help stop shoplifting in its tracks".

Fuel duty

Fuel duty will be frozen this year and in 2025, with the temporary 5p cut retained. The government said this will save the average car driver £59 in 2025-26.

Vaping products duty

A flat-rate excise duty on all vaping liquid will be introduced from 1 October 2026 at £2.20 per 10ml vaping liquid, accompanied by an equivalent one-off increase of £2.20 per 100 cigarettes/50g of tobacco in tobacco duty to "maintain the financial incentive to switch from tobacco to vaping".

Minimum wage

From April 2025, the minimum wage for employees aged 21 and over will increase by 6.7% to £12.21 an hour, equivalent to £1,400 a year for a full-time worker.

Minimum wage for workers aged 18 to 20 will rise by 16.3% to £10 an hour.

Late payment

To help small businesses deal with late payment of invoices, from 1 October 2025, companies bidding for government contracts over £5m per annum will be excluded from the procurement process if they do not pay their own suppliers within an average of 45 days.

Small business funding schemes including Start Up Loans

Around £1bn will be provided to the British Business Bank in 2024-25 and 2025-26 to "enhance access to finance for small businesses". This includes over £250m each year for Start Up Loans and the Growth Guarantee Scheme.

To boost access to finance for women entrepreneurs, the bank will also invest £50m into female-led funds in line with the aims of the Invest in Women Taskforce that was set up by the previous government and is continuing under the Labour administration.

Funding for creative industries

The Budget confirmed that the government will continue to fund the following programme for the creative industries:

The DCMS will also continue to fund the following creative industries programmes:

• The Create Growth Programme: Supports creative businesses in England outside of London.

• Global Screen Fund: Supports innovative independent filmmakers to showcase Britain's screen sectors globally.

• UK Games Fund: Develops talent and awards grants to early-stage video game studios.

• Supporting Grassroots Music Fund: Enables grassroots music venues, recording studios, promoters and festivals to apply for grants of up to £40,000.

The government also said the £50m Creative Industries Clusters programme will fund creative clusters in new sub-sectors and regions over the next six years, and funding for the Creative Careers Programme for 11-18 year olds will be increased to £3m.

Audio-visual tax relief

The government confirmed the measure announced in the previous government's Spring Budget 2024 that from 1 April 2025, film and high-end TV productions will be able to claim an enhanced 39% rate of audio-visual expenditure credit on their UK visual effects costs.

UK visual effects costs will be exempt from the credit's 80% cap on qualifying expenditure. Costs incurred from 1 January 2025 will be eligible.

Made Smarter Adoption programme

Funding will double to £16m in 2025-26 which means the scheme will be extended to all nine English regions. The scheme supports small manufacturing businesses to adopt advanced digital technologies.

Shared Prosperity Fund

The UK Shared Prosperity Fund, the government's community and regeneration fund, will be extended but at a reduced level of £900m for another year. It was due to end in April 2025. The government said "this transitional arrangement will allow local authorities to invest in local growth, in advance of wider funding reforms".

Help to Grow and Growth Hub in England

The government said it will continue to fund the Help to Grow: Management course and Growth Hubs in England in 2025-26.

Making Tax Digital for Income Tax Self Assessment (ITSA)

Making Tax Digital for ITSA is part of the government's efforts to digitise the tax system.

It had already been planned that from April 2026, self-employed individuals and landlords with income of more than £50,000 will need to submit quaterly tax information to HMRC via digital means. It will apply to those with income between £30,000 and £50,000.

In the Budget, the government said it will expand the rollout to those with incomes over £20,000 by the end of the Parliament, with the precise timing announced at "a future fiscal event".

E-invoicing

The government said it will publish a consultation in early 2025 to establish standards and increase the adoption of electronic invoicing.

Enterprise Nation has called for measures around boosting the use of e-invoicing in our submissions to government, including in our 21 small business recommendations sent to the Treasury for the Budget.

'Small Business Strategy Command Paper'

The government said it will publish a "Small Business Strategy Command Paper next year, setting out "the government's vision for support for small businesses".

The government said the strategy will cover areas including "boosting scale-ups, growing the cooperative economy, creating thriving high streets, making it easier to access finance, opening up overseas and domestic markets, building business capabilities, and providing a strong business environment".

Small business adoption of technology

The government has extended the SME Digital Adoption Taskforce, which Enterprise Nation founder Emma Jones is part of.

An interim report will be produced in early 2025, and the Department for Business and Trade will announce details a £4m "pilots package" to encourage tech adoption for SMEs.

Enterprise Nation's reaction

Emma Jones, Enterprise Nation founder, said:

Today the chancellor has taken some very difficult decisions. Tomorrow, small businesses must do the same: do they put up their prices, redirect growth investment or decrease their staffing levels?

"While we are pleased to see some allowances have been made for the smallest firms that employ people on the minimum wage without having to pay National Insurance, it will not touch the sides when it comes to the £25bn tax hike on businesses announced.

"Small businesses are resilient in the face of adversity, but they will need help to rethink their strategy to cope with an increased tax burden.

"We're relieved to see that anticipated increases in Capital Gains Tax and Business Asset Disposal Relief were lower than expected.

"We welcome a fresh discussion on business rates, and are ready to engage, but the announced reduction of the Business Rate Relief will see costs for many independent high street retailers almost double from April, so we must see urgent progress on this.

"We are pleased the government listened to our pleas for continuity on business support with extensions for the Shared Prosperity Fund and Help to Grow: Management.

"We look forward to working with the government on their small business strategy to help ensure small businesses can trade through increased costs."

Small business owners' reaction

Read what some entrepreneurs from the Enterprise Nation community have to say about the Autumn Budget here.