Adrian Hyde, President

IPA Insolvency Practitioner newsletter, November 2024

It’s been a turbulent month; since my last column we have had the first budget from this government, and the US election.

The response to both has been mixed and it was suggested I title this column “the good the bad and the ugly”. I think so far, I should limit it to “the good, the bad, and the unknown”!

From a business perspective, from Ms Reeves there was good, 40% relief on business rates for retail, hospitality and leisure industry in 2025-26, 25% cap on Corporation Tax, No fuel duty increase, and 100% expensing of capital expenditure to continue. 

There was also bad, with National Minimum Wage rising to £12.21 for adults over 21, with additional increases for workers below 21 and apprentices. This will significantly affect industries such as retail and hospitality, many of whom are still recovering from the long term effects of Covid. Employer’s National Insurance is also seeing a rise of 1.2% from April 2025 and although there was also an allowance changing from £5,000 to £10,500 the increase in NI contributions will still increase costs for many businesses.

The “unknown” is what the overall effect will be. The initial response has most definitely been ugly; economists at Barclays are suggesting that the effect will undoubtedly increase business failures. Tesco report a £250m pa increase in its NI bill, and as a sector, the major supermarkets suggest it will be in excess of £1.3bn. Whilst they themselves could absorb it, who knows if they will, but their suppliers will find it very difficult to do so in the same way.

On the flip side, a big impact on many in our sector is the crypto price bounce that has resulted from Mr Trump’s success in the US presidential election – the impact so far has been substantial and analysts predict that it will continue through next year, helping many of those of us recovering assets in that sector to boost creditor returns.

Hopefully the next month will be quieter, but who knows.