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Autumn Statements

I love Autumn, the crisp air, the colours in the landscape, hot chocolate and roaring log fires.

What I'm not enjoying this Autumn though is the air of exhaustion and lack of optimism surrounding some of the business owners I work with and network with. Some are feeling the squeeze of a drop in sales, the unpredictability of their forecasts and a lack of talent when looking to recruit.

Whilst Jeremy Hunt's Autumn Statement on the surface has provided some support to businesses (in terms of rates and full expensing) , they are simply extensions of current schemes and do not introduce any new aid for business at a time when the economy is stagnating.

There is some relief for individuals with the reduction in National Insurance, 12% down to 10%, from 6th January 2024 along with the scrapping of Class 2 National Insurance and reduction in Class 4 (from 9% to 8%) for the self employed from 6th April 2024.

My biggest concern is the increase in the national living wage (NLW). Whilst I fully agree that everyone should earn an income they can live off, the whole burden of this increase is put wholly on the employers; rather than through the Government making overdue changes to personal allowances or tax brackets.

The new NLW will be £11.44 from 6th April 2024, this represents an increase of 9% from the current rate of £10.42. With the addition of bringing the 21-22 year old bracket into the new NLW rate this is a 12% increase. For employers the cost is higher, with employer's NI and pension contributions. Employers will also have to assess other members of staff who were originally just above the NLW and potentially review other salary bands to check on differential erosion..

With a minimum of a 9% increase in costs for employers, I cannot see how small businesses will have the free cash to invest in growth or productivity gains.

With some further turbulent times ahead a forecast and cash plan are more important than ever. If you would like assistance to get forecasting in place then please get in touch for a chat.

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