2024 Labour Budget: Overview for small businesses

Chancellor Rachel Reeves has delivered Labour's first Budget since 2010, introducing £40bn in tax changes that will significantly impact UK businesses. As your local accountancy partners in Gravesend, we've analysed the key changes affecting SMEs and startups.

Capital Gains Tax Changes

Significant changes to Capital Gains Tax (CGT) rates include:

• Basic rate CGT on share profits increasing from 10% to 18%
• Higher rate CGT on shares rising from 20% to 24%
• Property CGT rates remain unchanged
• These changes will significantly impact investment strategies and business sales

National Insurance Reforms

The most substantial change affects employer National Insurance contributions:

• Rate increase to 15% on salaries above £5,000 (previously 13.8% above £9,100)
• Employment Allowance doubled to £10,500 for smaller companies
• Expected to raise additional £25bn annually

Corporate Taxation

Several significant changes to business taxation include:

• Corporation tax maintained at 25% on profits over £250,000 until next election
• Private equity managers' tax rates increasing from 28% to 32% from April
• New green technology investment reliefs introduced

Property and Stamp Duty Changes

Important changes to property taxation include:

• Stamp duty surcharge on second homes increasing from 3% to 5% in England and Northern Ireland
• Additional £500m boost to affordable homes budget until 2026
• Social housing providers allowed to increase rents above inflation

Employment and Wages

Key changes affecting workforce costs:

• Minimum wage increasing to £12.21 per hour (from £11.44) for over-21s
• 18-20 year old rate rising to £10 (from £8.60)
• Movement towards a single adult rate planned

Industry-Specific Measures

Transport and infrastructure investments include:

• Fuel duty cut maintained for another year
• £500m allocated for pothole repairs in England
• Increased Vehicle Excise Duty on new petrol cars
• 50% increase in Air Passenger Duty for private jets

Economic Outlook

The Office for Budget Responsibility predicts:

• 1.1% economic growth this year
• 2% growth next year
• 1.8% growth in 2026
• Inflation averaging 2.5% this year, 2.6% next year

Tax Planning Opportunities

Key actions for businesses to consider:

• Review investment portfolios in light of increased CGT rates
• Consider timing of asset disposals before new CGT rates take effect
• Review payroll structures before NI changes take effect
• Assess eligibility for increased Employment Allowance
• Evaluate green technology investment opportunities

Next Steps

Our team at MCC Partners is ready to help you navigate these changes, particularly the significant updates to Capital Gains Tax and National Insurance. Based in Gravesend, we understand the specific challenges facing Kent businesses. Contact us at 01474 619 990 or This email address is being protected from spambots. You need JavaScript enabled to view it. for personalized guidance on optimizing your tax position under the new budget measures.

We'll continue updating our analysis as additional details and guidance emerge from HMRC. Subscribe to our newsletter for regular updates and practical tax planning advice.