HOW THE 2024 UK BUDGET IMPACTS BUSINESS OWNERS—AND WHY THE UAE MIGHT BE A BETTER CHOICE

Q: CONSIDERING A MOVE TO THE UAE?

The UK’s recent budgetary changes underscore the growing tax pressures on entrepreneurs and business owners. For those evaluating a relocation or expansion, the UAE offers a stable, tax-friendly environment that can support both personal and business growth objectives. By providing a pro-business framework, a favourable tax regime, and a well-connected global hub, the UAE positions itself as an ideal choice for long-term wealth preservation and opportunity. The UK’s 2024 budget introduces higher tax rates and complex compliance requirements that may impact your business and personal wealth. Creation Business Consultants can help you navigate these changes, offering tailored strategies to maximize tax efficiency and explore the advantages of establishing in the UAE’s low-tax environment. Reach out to our team for a complimentary consultation on safeguarding your financial goals amidst these evolving tax regulations.

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This article has been researched and written by the Tax & Compliance Team at Creation Business Consultants. AI has not been used in generating this article.

The UK Autumn Budget 2024 makes a number of tax changes to address fiscal challenges and introduces a range of new costs for investors and business owners to navigate. These included changes to capital gains tax thresholds, national insurance hikes, restrictions on non-domicile benefits, and myriad complex compliance requirements. As such, if you find yourself subject to some or all of these taxes, alongside less tax-efficient operations than Australia, the UAE represents an increasingly attractive alternative. As a business-friendly country, it has tax advantages, and an ideally positioned, well-connected location, the UAE may be the option for UK entrepreneurs looking to preserve wealth and grow personal, investor or business opportunities.

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MAJOR BUDGET CHANGES IMPACTING UK BUSINESS OWNERS IN 2024

BUDGET CHANGES	BUDGET IMPACT	IMPACT ON BUSINESS OWNERS	UAE ADVANTAGE
Rising Capital Gains Tax (CGT) and Limits on Reliefs	The upcoming budget increases CGT rates to 18% for the lower rate and 24% for the higher rate, up from 10% and 20% respectively. The increased rates will apply to disposals from 30 October 2024 onwards. This will impact Business Asset Disposal Relief (BADR) and Investors' Relief (IR), which will increase to 14% by April 2025 and 18% by April 2026.	These changes have the potential to reduce net returns from the sale of assets (and on the sale of your business) and impact tax and financial planning for UK business owners. Most will be facing reduced post-sale returns with potentially less or no capital available for reinvestment or future planning.	The UAE does not charge capital gains tax. As a result, business owners may be able to retain a larger share of their profits for subsequent reinvestment in their businesses or personal wealth.
Changes in National Insurance Contributions (NICs)	The budget includes the increase in employer NICs from 13.8% to 15% effective from April 2025. The threshold at which employers commence paying NICs will be dropped from £9,100 to £5,000, thus increasing employment costs. The Employment Allowance has increased from £5,000 to £10,500.	These changes will increase costs for small and medium-sized businesses, put pressure on their funds and affect their capacity to employ staff.	There is no income tax, no National Insurance in the UAE, lower employment costs, and companies can focus their resources on growth and expansion.
Removal of Non-Domicile Tax Benefits and New Inheritance Tax (IHT) Rules	As of April 2025, the non-domicile tax status will be replaced by residence tax status, with the exception for foreign income and foreign capital gains. From April 2025, the IHT relief from agricultural and business property will apply only up to £1m, leaving anything above £1m to be taxed at effectively 50% of the 20% IHT charge.	It means UK-based business owners can no longer expect offshore assets and trusts to be shields from IHT. Also, UK residents with worldwide assets may undergo tax implications if they have been UK residents for 10 out of the past 20 years due to the 10-year exit rule.	The UAE is a perfect country because it does not impose inheritance tax, allowing business owners to preserve their wealth and pass it down to future generations without worrying about the hassle of UK IHT compliance.

WHY THE UAE REMAINS AN ATTRACTIVE CHOICE FOR BUSINESS OWNERS

In light of the abovementioned changes in the budget, UK investors and businesses may view a number of aspects of the UAE’s regulatory environment as appealing and generally beneficial:

Tax Efficiency:

There is no capital gains tax, inheritance tax or personal tax in the UAE. This creates a unique circumstance for business owners to maximise wealth retention.

Pro-Business Environment:

UAE free zones have a good reputation for company formation processes and structures, 100% foreign ownership, and are subject to only a 5% VAT. This makes the cost of doing business clear.

Global Connectivity:

The UAE’s strategic location provides easy access to markets across Europe, Asia, and Africa, making it ideal for international business and trade.

No Withholding Tax Policy:

The UAE’s policy allows international investors, including multinational corporations and private equity firms, to repatriate profits without tax barriers. Foreign investors benefit from no withholding tax on dividends or interest, a significant advantage over other jurisdictions.

CONCLUSION: CONSIDERING A MOVE TO THE UAE?

Recent budgetary changes in the UK demonstrate the increasing pressures of tax on entrepreneurs and business owners, and for anyone considering relocation or expansion, the UAE represents a safe and tax-favourable environment to grow wealth and work towards personal or business objectives. With a pro-business framework and a favourable tax environment providing access to connect with the rest of the global economy, the UAE is positioned to offer wealth preservation and opportunities to support long-term personal or business objectives.

The 2024 UK budget introduces higher tax rates and more complicated compliance requirements that may impact your business and personal wealth. Creation Business Consultants can help you navigate through these issues by providing your business with a number of tailored strategies to optimise your tax efficiencies, alongside the advantages of establishing in a low-tax environment like the UAE.

Reach out to our UAE Tax Consultants team for a complimentary consultation on safeguarding your financial goals amidst these evolving tax regulations.

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