As the 2024 Autumn Budget approaches, small business owners and freelancers across the UK are anxiously awaiting the Chancellor’s announcements on 31 October. With the economy in a delicate state, certain policy changes could be disastrous for freelancers, small business owners and the economy, according to a Newspage Agency report.
Unfunded expenditure could lead to economic instability
One of the far-reaching concerns revolves around the possibility of unfunded government spending. Mogens Rye, Founder of Rye Outsourcing, warned: “For the Bank of England to do their part and continue the rate cut cycle, it is imperative that the government delivers a fully funded Budget. The one thing I would not want to see is a return to unfunded expenditure.”
Rye’s fear is that reckless fiscal policy could undermine efforts to stabilise inflation and restore economic confidence. Small business owners are wary of short-term, unfinanced expenditures that could lead to higher taxes or cuts to essential public services down the road.
Pension complexity is a barrier to future savings
For Faisal Sheikh, Managing Director at Monmouth Capital, pensions are a critical issue. He expressed worries that the Chancellor might make an already complicated system even worse: “Don’t, whatever you do, make pensions any more complicated than they already are. It really is that simple. If you do, you risk alienating even more people from saving for their futures.”
His concern is rooted in the fact that small business owners and freelancers often struggle with long-term financial planning, and any additional complexity could discourage savings altogether.
Dividend tax hikes are a threat to small business growth
Another key worry shared by small business owners is the potential for increased taxation on dividends. Keith Budden, Managing Director at Ensurety, spoke on behalf of many in the small business community: “One thing I would not like to see in the forthcoming Autumn Budget is any increase to the taxation of dividends, especially for small companies with less than £2 million turnover.”
Budden explained that dividend payments are often the only viable way for business owners to reward themselves for the risks they take. Any rise in dividend taxes could dissuade people from starting new businesses, ultimately stifling growth. “That, in turn, will have a massive impact on this country’s growth prospects,” Budden warned.
Could we see an exodus of landlords?
In the property sector, Sally Asling, Director at ProFind Property Recruitment, expressed deep concerns over how changes to taxation or regulations might impact landlords. “I am very concerned about the whole property industry. Labour’s reforms on the rented sector are driving out landlords,” she explained.
Many in the property business fear that further changes, especially regarding Capital Gains Tax or other property-related taxes, could exacerbate this trend, leading to a significant reduction in available rental properties.
Justin Moy, Managing Director at EHF Mortgages, echoed the concerns of property professionals regarding Capital Gains Tax. He argued that any meddling with CGT could have devastating effects on the housing market.
“Penalising landlords even further, at a time when we need to encourage more social housing options, will just encourage a mad exodus of investors and put significant strain back on the Government,” Moy explained.
His fear is that increasing the tax burden on landlords could ultimately cost the government more in the long term, outweighing any short-term revenue gains.
Microbusiness taxation: is it taking risk into consideration?
For freelancers and microbusiness owners, the possibility of increased taxes feels especially daunting. Freelance strategist Matthew Knight called for more sensitivity to the challenges faced by sole traders and small enterprises. “Whenever there’s talk of increasing business taxes, there’s little nuance to consider the impact this has on struggling microbusinesses and the self-employed, who are already taxed twice in the form of income tax and corporation tax,” Knight said.
He also highlighted the lack of protections for these groups, such as sick pay and pensions. Knight’s hope is for more supportive policies that would help entrepreneurs rebuild the economy from the ground up, powering growth and job creation.
Small businesses need stability, not surprises
Across the board, small business owners and freelancers are urging the government to think carefully about the real-world impact of any new policies. They stress that while reforms and changes are sometimes necessary, they must be implemented thoughtfully to avoid unintended consequences that could slow growth, stifle entrepreneurship, or worsen the housing crisis.
As the Chancellor prepares to unveil the Autumn Budget, one message from small business owners is clear: what they don’t want to see is anything that makes an already challenging economic environment even more difficult. Whether it’s avoiding complicated pension reforms, refraining from dividend tax hikes, or ensuring fiscal responsibility, these entrepreneurs are advocating for stability and support as the country looks to rebuild its economy.
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We, locum doctors and nurses, are facing very difficult time as NHS has stopped hiring UK trained locums. Most hospitals have taken staff from outside UK without proper training because they are much cheaper, All outside IR35 posts are taken off too. It is so unfair for free lancers as well as patients and general public.