As a business owner or leader, the festive season provides a rare opportunity actually to slow down and take some out of the day-to-day. And now that it is behind us, it’s time to start thinking/planning for the big financial changes coming this April that will affect you and your business.
I know what you’re thinking—we’ve barely recovered from the holiday chaos, whether that’s adjusting to normal routines or dealing with early mornings if you have young children like me. And let’s face it, those ambitious January resolutions? Many have already started to fracture, be it the optimistic diet, gym routine, or dry January. So, why make January worse? Go ahead—treat yourself!
But here’s the thing: if you haven’t started thinking about the financial tax changes coming into play in April, it’s officially time to get it on your radar. Grab a coffee (or a green tea, if you’re still sticking to your health goals), and let’s dive into what’s ahead and how you can prepare.
Max Fellows
Max Fellows
The latest budget announced by the current government late last year sets the stage for some significant shifts in taxation and regulation. For business owners in the UK’s creative and events sectors, these changes bring both challenges and opportunities. As we look toward April 2025 and beyond, preparation will be key. Here’s a breakdown of what’s changing, what it means for our industry but you specifically, and how you can navigate these changes to safeguard your business.
Key changes to know
1. Capital Gains Tax (CGT) increases
CGT rates will increase from 20 per cent to 24 per cent in April 2025 and to 26 per cent in April 2026. This directly affects the sale of businesses and valuable assets. Additionally, Entrepreneurs’ Relief—renamed Business Asset Disposal Relief (BADR)—will rise from 10 per cent to 14 per cent in 2025 and to 18 per cent by 2026.
For creative and events businesses, which often rely on intellectual property and customer loyalty as key assets, these changes could significantly impact sale valuations and after-tax proceeds.
2. VAT on private schools and broader implications
Starting in 2025, private school fees will be subject to VAT, and charitable rate relief for these institutions will be removed. While this may seem unrelated to business operations, it could indirectly affect senior employees with children in private education.
3. Employer National Insurance Contributions (NICs)
From April 2025, employer NICs will rise from 13.8 per cent to 15 per cent, and the Secondary Threshold—the earnings level at which employers start paying NICs—will drop to £5,000 from £9,100. While smaller businesses may benefit from an increased Employment Allowance, these changes will increase overall staffing costs.
4. Pension tax relief reform
Anticipated reforms may move pension tax relief to a flat rate, which could reduce benefits for higher earners. This is particularly relevant for business leaders and senior creatives who rely on flexible pension contributions as part of their financial strategy or remuneration.
5. Inheritance Tax (IHT) uncertainty
Though no immediate changes to IHT were announced, potential reforms to Business Property Relief (BPR) could affect generational planning for family-owned event businesses.
What business owners need to think about
1. Exit strategies
With CGT rates rising, now is the time to evaluate your exit options. For those considering a sale, advancing the timeline to complete transactions before April 2025 could result in significant tax savings.
An alternative to a sale, consider Employee Ownership Trusts (EOTs) as a tax-efficient alternative. EOTs allow you to sell your business to employees, avoiding CGT altogether, provided certain conditions are met. This model not only retains the company’s culture and legacy but also aligns with the creative sector’s collaborative ethos.
Although they have been around for some time, EOTs are still fairly unknown and not yet widely adopted. That being said, they are gaining traction for several reasons as they provide a tax-efficient way for owners to transition their businesses while protecting their legacy and empowering their teams. Recent examples like Brand Nation, 2LK, and previously, First Event, demonstrate the potential of this model.
2. Succession Planning
For those aiming to pass the business to the next generation, review your plans with an eye on potential IHT and BPR reforms. Early preparation can help minimise tax burdens and ensure a smooth transition.
3. Cost management
The rise in NICs and potential increases in employer costs make workforce planning critical. Evaluate whether your current staffing model is sustainable and explore technology or freelance talent to reduce fixed costs.
4. Cash flow and investment
Higher taxes and operational costs might put pressure on cash flow. Plan for these by building a financial buffer and exploring options like the Annual Investment Allowance, which remains capped at £1 million annually, allowing businesses to deduct the full value of certain capital investments.
5. Adapt to regulatory changes
Employment law reforms may introduce stricter rules for freelance and zero-hour contracts, key components of the events industry workforce. Begin reviewing contracts and working practices now to ensure compliance with upcoming legislation.
How to prepare
1. Seek expert guidance
Engage financial advisors and legal experts to assess your specific situation. Tax planning is more critical than ever, particularly for creative businesses with unique asset structures.
2. Evaluate your exit timeline
For those considering a sale, act sooner rather than later to avoid higher CGT rates. If selling outright isn’t an option, explore phased exits or EOTs to reduce tax exposure.
3. Review staffing models
Assess how changes in NICs and employment laws will affect your workforce. For smaller agencies, the increased Employment Allowance may offset NICs, but larger firms will need to budget for these higher costs.
4. Plan for personal tax changes
For owners drawing income via PAYE or dividends, monitor potential income tax reforms and plan accordingly. Revisit pension contributions and explore other investment vehicles to optimise tax efficiency.
5. Stay agile
The creative and events industries thrive on adaptability. While the changes outlined in this budget might seem daunting, they also present opportunities to rethink traditional business models, embrace innovation, and build resilience.
The creative and events sectors are no strangers to transformation. As we navigate these new changes, the key is to stay informed, be proactive, and leverage expert advice. Whether you’re planning an exit, restructuring your workforce, or simply preparing for the road ahead, there are steps you can take now to set yourself up for success.
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