Increased tax burdens on businesses

One of the most significant outcomes of the budget is the rise in taxes imposed on businesses. This decision is likely to strain many companies, particularly in sectors like care, retail and hospitality, which are still recovering from the pandemic. With operating costs already elevated, the increased tax burden means many businesses will need to re-evaluate their financial strategies to maintain stability and growth.

Strain on SMEs: National Insurance and Minimum Wage hikes

Small and medium enterprises (SMEs) are at the forefront of these changes. The increase in Employers National Insurance contributions, combined with the rise in the minimum wage, places substantial financial pressure on SMEs—many of which are already struggling to recruit and retain staff.

Additionally, with the relatively high Bank of England base rate leading to higher than typical borrowing costs, SMEs will face challenges in managing their finances while trying to attract and keep talent. These factors necessitate proactive planning and creative solutions to ensure these businesses can navigate the pressures ahead.

Additional pain with Capital Gains Tax increase

The budget also introduced changes to Capital Gains Tax, which will impact business owners considering selling their operations. Although not as severe as perhaps anticipated, this area complicates tax planning, and many operators will need to reassess their medium term strategies.

Strategic planning for the future

In light of the budget's outcomes, our clients must adopt a forward-thinking approach. It’s essential to revisit financial strategies, explore potential funding options, and prepare for the implications of tax changes.

At Christie Finance, our commitment is to provide you with the insights and support needed to thrive in this evolving landscape. As we continue to monitor the effects of the budget, we encourage our clients to reach out for advice tailored to their specific circumstances.