By Max Fellows, Founder of allpoints
With the previous government—widely considered more business-friendly—now out of power and the new government poised to deliver its first budget on 30th October, all eyes are on how this shift might impact business growth and stability. For those of us in the event and creative sectors, understanding these changes will be critical in navigating what’s to come.
While much of the commentary is focused on the broader economic outlook, we’re looking specifically at the potential impacts on event and creative businesses. Here are some key areas likely to be addressed, and what they might mean for owners and senior leaders within our industries.
Disclaimer: These thoughts are purely our own, and we recommend seeking guidance from your board, financial advisors, and legal teams before making any decisions.
1. Employment Law Reforms
The current government has signalled sweeping reforms to workers’ rights, with 28 changes expected. These include statutory probation periods for new hires, removing the current two-year qualifying period for protection against unfair dismissal, and enhancements to paternity, parental, bereavement leave, and statutory sick pay. There are also likely to be new rules for freelancers and zero-hour contracts, alongside efforts to eliminate exploitative practices like fire-and-rehire. However, it’s worth noting that many of these reforms could take over a year to fully implement, giving businesses some time to adjust.
Additionally, while the current government has pledged not to raise National Insurance for employees, the Business Secretary has not ruled out raising employer contributions. This creates an expectation that employers’ National Insurance costs could increase in the budget. If your business employs a large workforce, this is a potential cost factor you’ll need to prepare for.
2. Capital Gains Tax (CGT) Increases
We’re expecting significant changes to CGT, with rates now rumoured to rise to between 33% and 39%, although they won’t align with PAYE as previously speculated. This will particularly affect those with premises or who are considering selling their business in the next few years, as the annual CGT allowance may also be reduced. Additionally, the treatment of CGT on owner-operated offices remains unclear, adding a layer of uncertainty for those with property investments.
It’s also important to note that Entrepreneurs’ Relief, now called Business Asset Disposal Relief (BADR), could come under review. Any changes to BADR could impact those looking to sell their businesses, so it’s essential to keep a close eye on this area if you’re planning an exit or major sale soon.
3. Inheritance Tax (IHT) Adjustments
While inheritance tax is always a point of debate, at this stage, we don’t know if there will be any changes to IHT in this budget. Similarly, the complex area of Inheritance Tax Business Property Relief—which currently allows qualifying business property to be passed on at a 0% tax rate—remains uncertain. Business owners planning generational transitions should stay informed, as even minor adjustments could have significant implications.
4. Business Rates Reform
A reform of the business rate system is expected, with the aim of raising the same revenue but through a “fairer” approach. This could include cutting rates for smaller businesses but closing loopholes that have benefited certain creative industry players. Agencies and event businesses should prepare for potential changes that could affect operating costs.
5. Pension Tax Relief Changes
We’re anticipating a move towards a flat-rate system for pensions tax relief. For business owners and senior leaders, this could make personal pension contributions less attractive, particularly for higher earners. This is an area where personalised advice from your accountant will be key, especially if you draw funds from your business via PAYE or dividends.
6. Private School VAT
For those with children in private education, the long-anticipated VAT on private school fees is coming. While the full 20% VAT is expected, many schools appear set to absorb some of this cost, likely passing through an increase of around 14-16%. For business owners, this could impact personal financial planning. That being said, there is a rallying of support for legal action against this from schools and parents so watch this space.
7. Impact on SME Taxation
Ultimately, this is the current government’s first budget appears to be positioning itself to increase taxation on SMEs—businesses that form the backbone of the creative and events industry. Now may be the time to assess whether you can take advantage of the current tax environment, but any decision to act should be carefully considered in consultation with your financial and legal advisors.
The budget is on the horizon, and for creative business owners, it’s a time to be strategic and proactive. Understanding how these potential changes might impact your business can help you stay ahead of the curve. While we aren’t political experts, when it comes to buying, selling, or scaling your business, that’s where our expertise lies.he shareholders, but for the clients and staff alike.ot only survive a few more rounds but can become true champions!