With UK tax increases looming for 2024 it’s crucial to prepare your business to maintain financial stability and growth. At Williamson & Croft, our expert tax specialists are here to help you navigate these changes effectively.

Projected tax increases for 2024

While specifics are still emerging, businesses should brace for potential increases across various tax categories. The Chancellor will present the budget to Parliament in autumn 2024, revealing the details of government policy, including changes to the tax system.

Key areas of tax increases

Here’s what we know so far:

VAT on private schools: It has been confirmed that from January 2024, private schools will no longer be exempt from VAT, facing a new 20% tax rate.

Corporation tax: The corporation tax rate rose from 19% to 25% for companies with profits over £250,000 in April 2023. Monitor for any potential adjustments to this rate or related policies.

National Insurance contributions: Income Tax and National Insurance are currently frozen at the current thresholds until 2028 so no increase is forthcoming.

Capital Gains Tax and Dividend Tax: These areas are frequently subject to review. While no specific changes have been confirmed for 2024 as of now, stay informed about potential adjustments.

Business rates: Keep an eye on potential changes to business rates, which are a significant expense for many UK businesses.

What’s the potential impact on UK businesses?

These tax changes could significantly affect your bottom line, cash flow, and operational strategies. You may need to reassess pricing, supply chain, and overall business model. 

Tax changes could also influence investment decisions and long-term growth plans.

4 preparation strategies for businesses

As the UK tax landscape evolves, proactive planning is essential for business success. By implementing the following strategies, you can better position your company to navigate upcoming changes while maintaining financial health.

1. Financial planning and budgeting

  • Review and update financial forecasts, accounting for potential tax increases.
  • Develop multiple scenarios: best-case, worst-case, and most likely.
  • Consider the timing of income and expenses to optimise your tax position.

2. Tax efficiency measures

  • Familiarise yourself with available tax reliefs such as R&D tax credits.
  • Review your business structure for potential tax advantages.
  • Reassess capital expenditure plans, considering the timing and nature of investments.

3. Cash flow management

  • Strengthen cash reserves by tightening credit policies and improving invoicing processes.
  • Review payment terms with suppliers and customers.
  • Consider alternative financing options like invoice factoring for short-term cash flow issues.

4. Investment considerations

  • Reassess investment plans in light of potential tax changes.
  • Explore tax-efficient investment vehicles like Enterprise Investment Schemes (EIS) or Venture Capital Trusts (VCT).

Remember, while tax considerations are important, they shouldn’t be the sole driver of your business decisions. Always consider the broader strategic implications of any changes you make.

How Williamson & Croft can help with tax increases

At Williamson & Croft, we’re committed to supporting your business through these changing times. 

Our expertise in UK tax law and business finance allows us to offer tailored advice based on your specific industry, size, and circumstances within the UK business landscape. 

We provide comprehensive tax planning services to help minimise your tax burden while ensuring full compliance with UK tax laws. 

Additionally, our team can work with you to revise your financial strategies, taking into account the upcoming UK tax changes. By partnering with us, you’ll be well-equipped to navigate the evolving tax landscape and position your business for continued success.

Don’t wait until the last minute – contact Williamson & Croft today to start preparing your business for the UK tax changes in 2024. By taking proactive steps now, you can position your business to thrive despite the challenges ahead.