Chancellor of the Exchequer Rachel Reeves laid out Labour’s first budget in 14 years – and the first budget to be delivered by a woman in UK history – this afternoon, including an increase in CGT and a rise in employers’ National Insurance contributions to 15%.
But what do business leaders make of the announcement?
Martin Edstrom, CFO, Paragon
“The next steps for businesses following the budget will be all about balancing planned investment against the impact of tax changes and adapting your business plan accordingly. The budget promises to increase employers’ National Insurance contributions by 1.2 percentage points, to 15%, from April 2025 and reduce the secondary threshold – the level at which employers start paying national insurance on each employee’s salary – from £9,100 a year to £5,000. Businesses will now need to pivot their strategies to navigate these new challenges. We need to remember that every tax increase can deter investment, reduce cash flow, and potentially halt expansion plans. Businesses need to prioritise agility and re-focus investment to make the most of the situation.”
Chris Camacho, CEO, Cheil UK
“The Autumn Budget’s measures seem to address only immediate fiscal gaps, overlooking the critical need for long-term economic resilience. The £40bn shortfall [Labour has been seeking to close] highlights the challenges the government faces, but increased business taxation risks making the UK less attractive for new and existing businesses. In an era of tax-friendly environments like Dubai and Cyprus, where incentives and cost structures are more favourable, UK-based businesses face difficult decisions about their future location and investments. This approach could dampen entrepreneurial growth and investment within the UK, with repercussions that will be felt by the entire British public over time and in particular in the job market.”
Ryta Zasiekina, co-founder, Concryt
“With a booming tech industry and so many innovative start-ups, it was easy to see why in the spring budget, former Chancellor of the Exchequer, Jeremy Hunt, claimed the UK was “on track to become the world’s next Silicon Valley”. Fast-forward to the Autumn Budget, and we have a new Chancellor and seemingly a new set of priorities that the fintech industry is notably absent from. While it declared ambitious plans for innovation and growth, one glaring question remains: what happened to those lofty aspirations outlined in spring? Despite investment in technology and fintech, the UK continues to face barriers that hinder its ability to compete with global innovation hubs. For the UK to become the next tech superpower, we need to see investment in the infrastructure required to support industry growth.”
Richard Chapple, co-founder, The Growth Foundation
“The anxieties we’ve all felt in the lead-up to this budget have been realised, but the worst is still to come. The government entered office with the right diagnosis of the UK economy – it has a systemic growth problem – yet, all the Treasury has shown us today is that they don’t know how to solve it. Coming on the tails of the worst PMI data for nearly a year, today’s budget – if it was going to be truly pro-growth – should have put supporting businesses at its core. It certainly shouldn’t be a raft of punitive measures, like the increase that’s been announced in employer National Insurance contributions and the hike in CGT. The former will incite higher operational costs for businesses, and consumers may be left to pick up the tab in the form of higher prices. In a price-sensitive market, where consumer confidence is fragile, this measure could dampen demand. And the latter could see the beginnings of a mass exodus of talent and investment from the UK – not quite the growth trajectory anyone had in mind.”
Lisa Miles-Heal, CEO, Silverfin
“This budget risks falling victim to Newton’s third law – generating an equal and opposite reaction. Its goal to foster economic stability and drive growth, may inadvertently become a blunt instrument that discourages investment – potentially holding back billions from reaching the British balance sheet. The rise in CGT might make a small dent in the £22bn ‘black hole’ in the short term. But it could also dissuade swaths of investors from risking their own capital. By chipping away at incentives, this approach may stifle the appetite for risk, dampening the flow of vital investment into UK businesses. Swaths of businesses will now need to model out this new tax reality, re-forecast cash flows, and ensure compliance – driving demand for advisory services from accountancy firms. For many, this may also prompt a shift towards lower-risk, tax-efficient investments. Every budget must balance fiscal responsibility with keeping the UK as an attractive market for investors. This budget, however, may have missed that mark.”
Alexandra Mousavizadeh, co-founder and co-CEO, Evident
“The budget’s focus on future investments missed a critical opportunity to address AI – an industry essential to our progress in science, technology and economic growth. With no clear strategy for AI funding, the UK risks falling behind globally, jeopardising our position as Europe’s leading tech hub. Without substantial AI investment, we risk stalling vital innovation and weakening our talent pipeline, leaving us ill-equipped to develop or attract the skilled professionals necessary for AI-driven industries.”
Image credit: Leon Neal via Getty Images
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