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The Budget: one week on

ended 05. November 2024

Tomorrow, a week will have passed since the Budget. We're putting together a number of stories on what business and charity owners think of it now that the dust has settled and you've had time to digest all the changes announced. What did the Government get right and what did it get wrong in your opinion? Has it impacted your business or charity already and how do you think will it impact you and your sector moving forward? Lastly, if you've seen any noteworthy trends or unintended consequences of the Budget since last Wednesday, tell us about them.

6 responses from the Newspage community

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Daniel Wiltshire
Actuary & IFA at Wiltshire Wealth
There's a very downcast atmosphere. The small business owners I've spoken to are despondent. I've had lots of questions about the practicalities of moving abroad. Others are looking to wind up limited companies. There’s a growing sense that the rewards of entrepreneurship no longer outweigh the risks. Discussions with retirees have been equally bleak. Those with large pensions, now locked in an inheritance tax trap, are enquiring about reverse mortgages. A surge in equity release arrangements could be the unintended consequence of this dismal Budget.
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Ben Perks
Managing Director at Orchard Financial Advisers
Now that the dust, and markets, are settling slightly after the Budget there is a level of normality returning. We have seen several property transactions fall through due to the increase in stamp duty and have had to 're-jig' figures on other deals to free up funds for tax. This week will be key in painting the landscape for the property market in 2025. Swap rates have been moving in all directions over the last few days and the MPC Base Rate announcement is imminent. Good news on the interest rate front could help counteract the post-Budget blues.
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Sam Kirk
Managing Director at J-Flex Rubber Products
The widely-expected national insurance hike could lead to many businesses putting a halt on recruitment plans and slower wage growth, the latter of which Labour have themselves acnowledged. In addition, the increase to Capital Gains Tax may impact buying and selling businesses, and although the Government have tried to ease these worries, it is unlikely to give business owners much comfort as they will just see an increase in the cost of doing business.
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Tony Redondo
Founder at Cosmos Currency Exchange
What the Government Got Right:
The public sector continues to grow with £170bn in new borrowing and £40bn in higher taxes on the private sector. However, public sector productivity has remained stagnant since 1997.

What the Government Got Wrong:
Raising the private sector tax burden to its highest level since 1948 risks discouraging investment and entrepreneurship. The largest tax hike in British history is expected to raise inflation and slow interest rate cuts, with workers facing stagnant wages as businesses limit wage increases.

Trends and Consequences:
Client feedback has been negative. Established business owners are cutting staff and halting expansion, while younger tech entrepreneurs are considering leaving the UK.

Impact on My Business:
Currency fluctuations will create opportunities for clients. With UK interest rates likely staying high, I expect the Pound to remain supported unless bond markets shift. Given the challenging UK outlook, I’ll focus on international clients.
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Matthew Knight
Independent Strategist and Freelancing Advocate at Leapers
Rachel Reeves says "the smallest businesses will not be affected" but that's simply not true. Whilst employers of 2-4 people may not be affected, the truly smallest businesses will be. Single person limited companies are treated as "employers", pay employer NI, but are exempt from the Employment Allowance benefit, leading to at least £600+ a year increase in their costs, at a time when many small businesses are already significantly struggling. In addition, employers who work with freelancers will simply pass on the increased cost of hiring through reduced day rates or project budgets. This increase will affect both small businesses and the self-employed, who are the country's least protected workers.
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Chloe Coucourakis
Germany Investment Manager at IP Global
The most significant change for property investment from the autumn UK Budget is the Stamp Duty increase on additional properties from 3% to 5%. Effective immediately, this hike raises acquisition costs for landlords and second-home buyers. For those investing in UK property, this could mean an additional £7,000 in Stamp Duty. This shift aims to level the playing field for first-time buyers, but may result in a tighter rental market that may potentially push rents higher.