How the 2024 UK Budget Could Reshape Business Choices
Andy Wood • December 23, 2024
How the 2024 UK Budget Could Reshape Business Choices: Is the UAE a Smarter Alternative?
The 2024 UK Budget delivered a series of tax increases that could weigh heavily on business owners. With higher corporate tax rates, reduced allowances, and more stringent compliance measures, running a business in the UK is becoming increasingly expensive. For those seeking growth-friendly environments, the UAE offers a compelling alternative, boasting a 9% corporate tax rate, zero personal income tax, and a growing global reputation as a business hub.
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This shift highlights the need for business owners to assess how tax policies align with their ambitions. In the UAE, businesses benefit from economic incentives, robust infrastructure, and a strategic global position, making it an attractive destination for international entrepreneurs.
Key Budget Changes and Their Impact
National Insurance Contributions
Employers face rising NIC rates (from 13.8% to 15%) and lower thresholds for payments. Despite an increase in the Employment Allowance, the added costs will strain resources for small and medium enterprises (SMEs).
The UAE has no income tax or NICs:
The absence of income tax or NICs allows companies to reinvest in growth without the burden of rising employment costs.
Capital Gains Tax Reform
CGT rates have risen to 18% for the basic rate and 24% for the higher rate, impacting disposals after October 2024. Additionally, Business Asset Disposal Relief (BADR) will climb to 14% by 2025. For entrepreneurs selling assets, these changes substantially reduce net returns, limiting funds for reinvestment.
The UAE has no CGT:
With no CGT, business owners retain more of their profits, fuelling growth and wealth preservation.
Changes to Non-Domicile Taxation and Inheritance Rules
From April 2025, the non-domicile regime will shift to a residence-based system, narrowing exemptions for offshore income. Additionally, inheritance tax (IHT) reliefs for agricultural and business assets will be capped at £1 million.
The UAE does not impose an inheritance tax:
Free from inheritance taxes, the UAE offers business owners the freedom to secure their wealth for future generations without complex compliance hurdles.
A Strategic Relocation?
For UK business owners, the Autumn Budget underscores the urgency of reassessing long-term plans. The UAE, with its favourable tax environment and vibrant business ecosystem, offers a unique opportunity to secure growth and preserve wealth in an increasingly complex fiscal climate.
Whether you’re planning to expand or relocate, expert advice is crucial. Our team is here to help you every step of the way. Book a call with one of our advisors below.
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How internationally mobile high-net-worth individuals structure global income while managing tax exposure across jurisdictions such as the UK and UAE.