What does Labour’s new budget mean to mid-market businesses?

What does Labour’s new budget mean to mid-market businesses? Mid-market businesses will pay more in taxes under Labour, but IT can lessen the bite.

The first Labour Government since 2010 has been elected and, not surprisingly, they plan to increase spending and investment on public services and have raised taxes accordingly.

The most important changes for most of our clients are the significant increases in National Insurance and the National Living Wage. Put simply, the cost of employing people has significantly risen and, in some cases, this will be game-changing.

So what can we do right now?

Automate. New technologies like AI and RPA can make a real difference in a mid-market business, especially in sectors like manufacturing, distribution and business services. These technologies can help reduce headcount or they can free up your staff for revenue-generating or more value-adding activities. See our mid-market AI briefing for more information.

Invest. The government plans to retain the existing Investment Allowances which means that computer hardware, certain kinds of software, and machines used for businesses purposes can still be deducted from before-tax profits. So you’ll still be able to claim on IT investments.

Use external experts, not employees. Many CEOs understand they need IT leadership, but they don’t want or need a full-time employed CIO, CTO, or CISO. Our team are all IT experts who understand business and technology.

One of our people can join your senior leadership team to find efficiencies at a fraction of the cost of a full-time employee and without the tax overheads.

Freeman Clarke IT leaders don’t make arrangements with any third parties, so you can always trust our recommendations are in the best interest of the company. We are flexible, so you can scale up or down as needed – we don’t insist on any lock-ins, so we’re always determined to deliver value.

Of course, we’re not tax advisors so check with your tax professional before making any decisions. And, regardless of who’s in power, every investment should have a clear business case.

Feel free to get in touch for a discussion. We have Regional Directors with experience in every sector across the UK, and they’re always up for a conversation about reducing costs with IT, no-pressure, no-strings attached.

We’ve helped mid-market businesses navigate bigger storms, always with a clear eye on what’s best for our clients.