“Invest, Invest, Invest”
The Chancellor’s key message at this Autumn’s Budget was that she wanted to “Invest in the Future and Rebuild Britain”. There will certainly be some initial shock for your clients that are employers, who will see an increase in the cost of their wages bill.
However, she has also announced some welcome structure and certainty in the small business environment. So, has the Chancellor provided enough to support growth and encourage small companies to invest too?
And as accountants and advisers, how can you help your clients to manage this new landscape?
5 announcements which provide opportunities for you to advise:
1. The announcement: an increase in employers’ national insurance rates and the national living wage from April 2025.
The impact for your clients: business owners may be concerned about their profitability and cash flow from next year.
Your opportunity: prepare financial projections and help clients assess whether they need to increase their prices to provide sufficient margin in their business. Also consider whether more internal capital can be extracted from supplier finance or stronger credit control, to improve cash flow.
2. The announcement: the Office of Budget Responsibility does not expect Consumer Price Inflation (CPI) to fall below 2% until 2029.
The impact for your clients: the Bank of England is targeted with maintaining CPI at 2% and uses interest rates to meet that aim. So, will this prediction mean interest rates stay higher, for longer?
Your opportunity: base rates will be set by the Bank of England, but individual lenders assess individual propositions and choose to apply higher margins to the riskier customers. Ensure your client’s business credit score is as strong as it can be, so that they meet the criteria for lower rates.
3. The announcement: the National Wealth Fund has been launched and now also incorporates the British Business Bank. The Growth Guarantee Scheme will remain in place until 31 March 2026. The National Wealth Fund has also been granted funds to invest in key sectors, as outlined in the Green Paper for the Government’s Industrial Strategy.
The impact for your clients: These government schemes may provide more routes for finance for businesses, large and small.
Your opportunity: help your client consider their future growth plans and the associated funding needs. For businesses who may not meet lenders’ standard security criteria, the Growth Guarantee Scheme may enable them to still receive an offer.
4. The announcement: the rates for Capital Gains Tax will increase immediately and the lower rates for Business Asset Disposal Relief (BADR) will start to increase from 6/4/25.
The impact for your clients: for any business owners who have been considering exit or retirement, if they are able to take advantage of BADR, they may accelerate those plans so they can exit by 5/4/25. Therefore, for those clients looking to grow, there will be more opportunities to acquire a company.
Your opportunity: discuss your client’s acquisition parameters and help them make an approach to potential target businesses. If discussions progress, speak to Capitalise about the various lending products which can be used to finance the acquisition.
5. The announcement: the current Capital Allowance regime is going to remain in place, with full expensing and annual investment allowances at their very generous levels.
The impact for your clients: business owners may be more willing to invest in new machinery, equipment and other assets.
Your opportunity: have regular conversations about when assets are due to be replaced, or if new equipment is required for a growing company. You can support them to prepare a finance application, so that they have been able to compare the best products and rates in the market in good time.
How we can help
At Capitalise we work with over 100 UK business lenders across the full range of finance products, allowing you to find the most suitable solution for your client’s needs. Plus, with the Credit Review Service, we can ensure your clients have the best credit profile possible and can obtain the best supplier terms.
For more information speak to your dedicated Partnership Manager.
Alternatively book a free demo of the platform and find out how you can help your service clients manage their business funding and access to capital.
