Autumn Budget 2024: Implications for Businesses, Public Practice, and the Recruitment Market

The Autumn Budget marked a historic milestone with Rt Hon Rachel Reeves MP delivering the first Labour Budget in nearly 15 years.

Unfolding against a challenging economic backdrop, the Chancellor set out tough measures designed to stabilise and stimulate growth.

But, will this be the result?

We’re exploring the key aspects and the expected impact, particularly for public practice accountants and accountancy firms.

For UK Businesses: Managing Rising Costs Amid Calls for Investment

The Autumn Budget placed a heavy emphasis on stability and long-term investment, though not without introducing increased costs.

The headline business impact is a rise in employer National Insurance Contributions (NICs), with a 1.2% hike alongside a reduction in the threshold for employer NICs to £5,000.

Smaller businesses will see some relief, however, with the Employer’s Allowance threshold doubling to £10,500. Although this provides some cushioning, businesses will need to prepare for tighter budgets and careful compliance management.

The government has also maintained the Corporation Tax rate at 25%, providing stability amidst other cost increases.

While these measures may temper growth ambitions, the Budget included positive investments aimed at long-term productivity.

Infrastructure received a substantial boost, with billions allocated to rebuild schools, upgrade public transport, and modernise NHS facilities.

“Successful businesses depend on successful schools, healthy businesses depend on a healthy NHS and a strong economy depends on strong public finances” said the Chancellor.

Yet, with projected growth remaining lower than hoped, balancing these immediate costs against future returns will be a complex equation for many businesses.

Impact on Employees: Wage Increases and Support for Working Parents

For employees, the Budget delivered both increased wages and support initiatives aimed at easing the financial pressures many currently face.

The Chancellor announced a substantial rise in the National Minimum Wage, up 6.7% to £12.21 per hour for those over 21, and a 16.3% increase for younger workers. While this is welcomed by employees, the added payroll burden will require careful planning from employers to offset these additional costs.

Whilst employees appear to have come away better off, especially following the recent Employment Rights Bill, higher business taxes will of course have a ripple effect – potentially hitting pay rises and lowering the benefits on offer.

Recruitment Market: Demand Surge for Financial and Compliance Expertise

As predicted, with new business costs and reporting obligations, the recruitment market is primed for a period of heightened demand, especially in finance, tax, and compliance roles.

The increased National Insurance, Capital Gains Tax adjustments, and new employer compliance requirements mean businesses will be turning to their accountants and tax specialists to navigate these changes efficiently.

The 'Business Tax Roadmap' promises to bring stability and clarity, creating demand for experts who can offer strategic financial guidance amidst regulatory changes.

Accountancy firms, in particular, will be crucial in helping businesses adapt, positioning the recruitment of skilled accountants and tax advisors as a top priority.

Following the announcement, key figures across the sector have voiced their thoughts. The Recruitment and Employment Confederation released an official response saying,

“Growth is delivered by businesses, and the mix of tax rises and other costs imposed on firms by the government will make getting there harder. Many business leaders will be feeling concerned about the direction of travel. If people are the engine of the UK’s growth, we need to invest in the workforce and the strategy that allows people to work the way they need to work.”

Change is coming for businesses of all sizes and accountancy firms that partner with a specialist recruiter will be ahead of the soaring demand for top-tier talent.

Public Practice: Increased Demand and New Opportunities

Public practice accountants are at the forefront of a changing landscape. The Budget represents a pivotal opportunity to grow, provided they secure the skilled candidates necessary to navigate an increasingly complex regulatory environment.

Recruitment demand isn’t the only impact public practice can expect. The sector itself, which is already riding a wave of change with the rise of M&As and an influx of PE-backing, could see further instability, and client expectations will change as their business strategies pivot to perform best under new regulations.

For firms, now is the time to work with a specialist recruiter. With skilled accountants and tax specialists in limited supply, acting quickly to secure top talent will be essential for firms looking to support clients’ compliance and financial resilience effectively.

For accountants, the Budget presents new career opportunities. Skills in tax law, compliance, and sustainable finance will be particularly sought after as businesses prioritise regulatory adherence and long-term fiscal health.

Are you struggling to keep up with the ever-changing landscape of public practice?

The team here at Public Practice Recruitment Ltd is here to help. Our established market positioning means we're able to see first hand how opportunities and challenges are impacting accountancy firms and accountants. Contact us today.