With the Autumn Budget recently announced, small business owners are in for a few changes.

While some of these updates will require careful planning, there’s also some good news in the mix. Here’s what you need to know if you’re running a small business and managing costs on a day-to-day basis.

Business Rates Relief:

The Autumn Budget has brought significant updates for retail, hospitality, and leisure businesses. While the current 75% business rates relief will end in April 2025, it will be replaced by a 40% discount, capped at £110,000 per business. This reduction represents a change that may present challenges. From 2026-27, there will be permanent reductions in business rates specifically for high-street retail, hospitality, and leisure properties.

National Insurance Increase (and Some Relief)

Now, the one that’s a bit harder to swallow: from April 2025, employer National Insurance Contributions are going up by 1.2 percentage points, with the rate jumping to 15%. Plus, the threshold at which employers start paying NICs will drop from £9,100 to £5,000. Not ideal, But there’s a silver lining. The Employment Allowance is increasing from £5,000 to £10,500, meaning many small employers won’t pay NICs at all. For small businesses with just a few employees, this might provide a welcome balance against the rate increase.

National Living Wage Increase

From April 2025, the National Living Wage will increase to £12.21 per hour for all eligible employees, and the National Minimum Wage for 18-20 year-olds will increase to £10.00 per hour for all eligible workers. The government is also increasing the minimum wage for under 18s and apprentices to £7.55 per hour. This means if you have staff on minimum wage, you’ll need to factor these rises into your planning. The increase supports better wages, but it does mean that managing payroll will require a little more attention and planning.

Embracing Digital: A £4 Million Tech Pilot for SMEs

The government is putting more behind tech adoption, especially for SMEs. The Department for Business and Trade will soon announce details of a £4 million pilots package to encourage tech adoption for SMEs! Small Business Minister Kevin Hollinrake previously highlighted how using tools like CRM systems and accounting software makes businesses more efficient – something I’ve seen first-hand in my practice. It’s a step in the right direction, especially as the UK ranks 5th in global innovation but we sit at 31st in knowledge absorption – so there’s massive potential for growth by making tech adoption easier. Watch this space – this initiative could make a real difference for small business efficiency.

Additional Updates for Small Business Owners

Interest rates on late tax payments will increase by 1.5 percentage points starting April 2025. This serves as a timely reminder to stay on top of tax deadlines to avoid unnecessary charges.

Conclusion

The Autumn Budget introduces important changes that small businesses should be aware of. As a business owner, it’s crucial to assess how these updates may affect your operations and financial planning moving forward. With the rise in National Living Wage and adjustments to National Insurance, having a robust bookkeeping and accounting system is essential for maintaining financial health. By embracing digital tools and staying informed, small businesses can navigate these changes more smoothly and position themselves for growth.