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Labour’s Autumn Budget is just around the corner (30 October) and many businesses are uncertain of what the next few years may hold for them.
The Prime Minister Keir Starmer has already warned of a “painful” Budget, with big changes to taxation, funding for public services, and incentives for investment.
For businesses, these changes can influence operational costs and market dynamics, so it is important to prepare your organisation and ensure it is agile and able to adapt.
Labour has proposed focusing on correcting fiscal imbalances while ensuring that businesses pay their fair share towards public funding.
While they have confirmed that there will be no changes to Income Tax, VAT, and National Insurance contributions (NICs), this has sparked speculation about other areas of taxation that they may target.
We could potentially see further changes to certain tax reliefs, such as R&D Tax Credits or capital allowances.
Labour is also expected to review taxes on wealth and dividends, potentially increasing the tax burden business owners and shareholders.
The Government has expressed its interest in supporting green initiatives and social enterprises.
This could come in the form of incentives or grants for businesses restructuring their operations to align with environmental or social goals.
Given the potential tax, regulatory, and incentive shifts, restructuring your business now could provide several strategic advantages including:
Restructuring your business can enhance agility, enabling you to better respond to both challenges and opportunities.
For example, breaking large teams into smaller, autonomous units can allow quicker decision-making and better alignment with shifting market demands or regulatory changes.
Key strategies include:
Given the way tax reliefs and incentives are changing, now is a good time to reassess your business’s resource allocation strategy.
Areas to focus on might include:
Adapting your talent strategy to meet current challenges can help your business stay competitive, particularly given potential changes to employment law and tax treatment of executive pay.
You might want to consider implementing the following:
If your business is considering restructuring, it is better to act early.
Engaging professional advice from your accountants can help ensure your restructuring strategy is aligned with both the current state and future direction of the UK economy.
By proactively adjusting to Labour’s policy shifts, your business can be better positioned for long-term success.
If you would like advice on restructuring your business ahead of the Budget, please contact our team.
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