Nick Pollard’s Post

Running a business in the UK is sadly becoming a less and less viable proposition. Our economy needs more people to be willing to start businesses and grow them if we are to have any chance of economic growth. The government's evident hostility towards business and their clear lack of understanding of it is both worrying and demoralising for those who have worked hard to build businesses, create opportunities for others and contribute positively to the economy. What the government seem to be completely blind to is that SMEs are the future of unlocking growth. Many SMEs could be capable of doubling, or even tripling their turnover if they are given the conditions to do so. How many large businesses could achieve that? Small businesses are criminally undervalued by society and by the government. 99% of businesses in the UK are SMEs, contributing an incredible 2.6 trillion to GDP each year. They are also about to be shafted in the budget. It appears that not only will employers national insurance be going up 2%, but that the threshold that employers pay the tax is set to reduce at the same time. I can tell you now, this is going to be disastrous for small businesses across the country. It is also going to seriously impact those who work in SMEs. 1. SMEs will have to raise their prices to cover the extra costs of employment, creating more inflation. 2. I can assure you that SMEs will not be hiring to anywhere near the extent they have been and will be extremely cautious about who they employ. 3. Many could decide to pack in altogether, fed up with increasing regulation, cost and zero support from government, leaving people out of work. 4. Many SMEs will cut back their plans for growth, not knowing when the next bombshell is going to hit them. 5. SMEs will simply not be able to afford to offer wage increases to employees that they may have done otherwise. This is an incredibly regressive move from the government and one I believe will seriously backfire. Rt Hon Rachel Reeves I implore you to think harder about how these policies are going to impact those who have the most potential to achieve the growth you say you want to achieve.

Key Highlights from the 2024 UK Budget for Business Owners National Insurance Increase • Employers’ National Insurance contributions will increase from 13.8% to 15% as of April 2025. • The contribution threshold is lowering from £9,100 to £5,000. • Small businesses will receive protections to offset some of this impact. Business Rates Relief and Reforms • A win for retail, hospitality, and leisure: permanent reductions in business rates start in 2026-27. • For 2025-26, the small business multiplier will remain frozen, and RHL properties receive a 40% relief (capped at £110,000 per business). • £1.9 billion in support is allocated to help high streets and small businesses thrive. Capital Gains Tax (CGT) Changes • The lower CGT rate will rise from 10% to 18%, and the higher rate from 20% to 24%. • Business owners with significant investment holdings should consider these changes in their financial planning. Inheritance Tax Adjustments on Business Assets • For family-owned businesses, inheritance tax on assets over £1 million is set at 20%, affecting succession planning. Minimum Wage Increase • The national living wage is set to increase by 6.7%, reaching £12.21 per hour, impacting payroll costs for minimum-wage staff. Alcohol Duty Adjustments • Alcohol duty on draught products will drop by 1 penny per pint from February 2025. • Alcohol duty on non-draught products will increase with RPI inflation, also beginning in February. Support for Spirits Producers • To support the spirits industry, mandatory duty stamps for spirits will be removed. • Investment will boost the Spirit Drinks Verification Scheme, particularly benefiting Scotch whisky producers.  Corporate Tax Roadmap • The corporation tax rate is capped at 25% for the duration of this Parliament, providing stability for businesses.

We really need to deal with this. State payroll taxes--like health insurance premiums--keep rising for #smallbiz and makes them less competitive with each passing year. You know you have a problem when the Tax Foundation has the state ranked dead last 50th for UI systems year after year. And these national rankings are watched by large employers on state investments on jobs, #mabiz #competitiveness

UK’s 2% National Insurance Reduction The UK’s 2% national insurance reduction is a key item multinational employers should understand from the UK’s most recent national budget announcement. National Insurance reduction: promoting work and financial stability. Regarding National Insurance, Emma Hadley (Howden) highlighted the 2% reduction in National Insurance Contributions as the headline for the workplace. The Chancellor stated this move was intended to promote growth and “make work pay” while safeguarding funding for public services. The NIC reduction will see employees now pay 8% of their earnings between £12,570 and £50,270, compared to the previous rate of 10% and before that 12%. This means that an average worker on £35,400 will receive a tax cut of over £450. Having more take-home pay could, of course, help people with cost-of-living challenges or prompt some to increase their pension contributions. However, Emma cautioned that the tax thresholds being frozen until 2028 will mean more individuals fall into the higher-rate tax bracket as inflationary pay increases take their pay above the upper threshold. Saba Haran (Howden Scotland) emphasized that the reduction in NIC would make a notable difference to many employees, particularly in Scotland, potentially improving their financial stability and enabling greater flexibility in budgeting and saving. Source: Asinta #uk #socialsecurity #employeebenefits #humanresources #rewards #nationalinsurance

Budget Highlights:- The main rate of class 1 employee national insurance contributions (NICs) will be cut from 10% to 8% with effect from 6 April 2024 and the main rate of class 4 self employed NICs will also be reduced from 8% to 6%. The high income child benefit charge (HICBC) will be reformed, increasing the HICBC threshold to £60,000 from April 2024. The rate at which HICBC is charged will be halved so that child benefit is not fully withdrawn until individuals have an income of at least £80,000. HICBC will apply on a household rather than an individual basis by April 2026. An additional UK individual savings account (ISA) will be created with a £5,000 allowance in addition to the current £20,000 ISA limit. The higher rate of capital gains tax (CGT) for residential property disposals will be cut from 28% to 24% from 6 April 2024. The furnished holiday lettings tax regime will be abolished from 6 April 2025. The value added tax (VAT) registration threshold will rise from £85,000 to £90,000 from 1 April 2024. The deregistration threshold will rise from £83,000 to £88,000. The non-UK domicile rules will be replaced, from 6 April 2025, with a regime based on residence.

There are nosies about increases to Employer National insurance in the budget this week. As an employer this a nuisance of a tax. It's really prohibitive to growth and taking on new staff. Do you think I want to spend it all? No. I want to grow the business and invest back. I did some further research and here's some context. The UK generates approximately £1.1 trillion in annual revenue, primarily from taxes. Major contributors include ✅ Income tax (£286.2 billion or 27%) ✅ National Insurance Contributions (NICs) (£201.4 billion or 19%) and ✅ VAT (£159 billion or 15%). 👉 Employers NICs contribute £120.84 billion (11.4% of total revenue) at the current rate of 13.8%. If the employer NIC rate increased by 2%, it would generate an additional £21.2 billion in revenue. A convenient amount to plug the £22billion "black hole" 🕳️ Do you not think that £120 billion or 11.4% of GDP! is enough for businesses to pay. I do. I understand choices need to be made but GDP growth was 0.3% for 2023. Contrast this to the 7% growth in 2021. The government could encourage more growth through business support and business / foreign investment amongst a host of other options for this money. Instead there is talk about increasing capital gains tax and other methods to disinsentivise people they claim aren't 'working people' Why? I believe it's the easy option and it's political. They can make those decisions now and then cut it in 5 years before the election so they look like the good guys. Watch this space.

The recent UK Budget announcement included several changes to the National Insurance (NI) budget. Here are the key points: 1. Increase in Employer NI Contributions: The rate for Employer National Insurance Contributions will increase from 13.8% to 15% starting from April 2025. 2. Lowering the Secondary Threshold: The earnings threshold at which employers start paying NI will be reduced from £9,100 to £5,000. 3. Employment Allowance Increase: The Employment Allowance, which allows eligible employers to reduce their NI liability, will increase from £5,000 to £10,500. These changes are expected to raise £25 billion per year. The aim is to help fill a funding gap and support public services without increasing taxes on working people. if you are trying to calculate the % increase cost of your employers National Insurance contribution, this will be 1.2% rate change plus 1.2% lowering threshold charges given a total rate of 2.4% cost increase to your Employer National Insurance liability.

Forwarded UK Budget including Research and Development support: *National Insurance (NI) ** Employer NICs Increase: NICs for employers will rise from 13.8% to 15%, starting April 2025. This means higher costs for businesses when paying their employees. * Lower NI Threshold: The threshold for paying NI will drop from £9,100 to £5,000, leading to more small businesses paying higher contributions. * Employment Allowance Boost: The employment allowance will increase from £5,000 to £10,500, potentially exempting 865,000 employers from paying NI and helping over 1 million businesses maintain current costs *Capital Gains Tax (CGT) ** Increase on Carried Interest: From April 2025, CGT on carried interest will rise to 32%, potentially discouraging investments. * General Asset CGT Increase: Lower rate will increase from 10% to 18%, and the higher rate from 20% to 24%, impacting the profitability of asset sales. *Minimum Wage Increase ** National Living Wage: From April, the wage for workers over 21 will increase by 6.7% to £12.21 per hour, adding to operational expenses for small businesses. * Youth Wage Hike: Workers aged 18-20 will see a 16.3% increase to £10 per hour, the largest ever, which could further strain budgets. *Business Asset Disposal Relief (BADR) ** Higher Tax on Exits: The tax on startup founders’ profits when selling their business will remain at 10% for now but will rise to 14% in April 2025 and 18% by 2026-27, potentially making it less attractive to build and sell businesses in the UK. *Research and Development (R&D) ** Protected R&D Funding: £20bn in funding will be safeguarded, with specific allocations for sectors like engineering and biotech, possibly benefiting small firms in these industries. * Multi-Year Sector Funding: Commitments include £1bn for aerospace and £2bn for electric vehicles, opening potential partnerships and contracts for small tech companies. *National Wealth Fund ** £70bn Investment Plan: New funding aims to support emerging industries like green hydrogen and gigafactories, offering potential opportunities for innovative small businesses to collaborate or supply services.

🌟 Breaking News: Budget 2024 delivers a game-changing boost for the self-employed! 🚀Exciting update, everyone! In Budget 2024, the government has slashed National Insurance Contributions (NICs) for self-employed individuals to 6% starting April 6, 2024. Plus, the main rate of Class 4 NICs drops from 9% to 8%, with Class 2 NICs abolished. What does this mean for you? 💰 Significant savings: Up to £569 annually for those earning £100,000 📈 Empowerment for self-employed professionals to reinvest in their businesses or personal development 🌱 A clear government commitment to supporting entrepreneurship and economic growth How will these NICs reductions impact your business or career aspirations? Let's celebrate entrepreneurship together and unlock new opportunities! #Budget2024 #SelfEmployed #Entrepreneurship #FinancialEmpowerment #BusinessGrowth 🚀💼

🌟 Breaking News: Budget 2024 delivers a game-changing boost for the self-employed! 🚀Exciting update, everyone! In Budget 2024, the government has slashed National Insurance Contributions (NICs) for self-employed individuals to 6% starting April 6, 2024. Plus, the main rate of Class 4 NICs drops from 9% to 8%, with Class 2 NICs abolished. What does this mean for you? 💰 Significant savings: Up to £569 annually for those earning £100,000 📈 Empowerment for self-employed professionals to reinvest in their businesses or personal development 🌱 A clear government commitment to supporting entrepreneurship and economic growth How will these NICs reductions impact your business or career aspirations? Let's celebrate entrepreneurship together and unlock new opportunities! #Budget2024 #SelfEmployed #Entrepreneurship #FinancialEmpowerment #BusinessGrowth 🚀💼