Autumn Budget 2024

The build up to the first Labour budget in 14 years has been highly anticipated and indeed feared in many quarters.

In her address, Chancellor Rachel Reeves delivered a series of tax measures that set out to “restore economic stability” across the UK whilst also focusing on the protection of the working people.

The changes delivered are not as significant as originally feared, but as with any budget, the impact of the various measures should be considered relevant to your own personal/business circumstances.

We highlight the key changes coming out of the budget as follows:

Employment Related Tax

• The rate of Employer’s National Insurance is set to increase by 1.2% to 15% from April 2025 onwards. In addition, the secondary threshold for Employer’s NIC will decrease from £9,100 to £5,000.
• Employer’s Allowance will increase from £5,000 to £10,500.
• The National minimum wage will increase by 6.7% from £11.44 to £12.21 per hour for adults over the age of 21. It is the government’s intention over time to introduce a single adult minimum wage rate. As this is phased in, the National Minimum wage for those under 21 will increase from £8.60 to £10 per hour (a 16% increase).

Capital Gains Tax (“CGT”)

• The lower rate of Capital Gains Tax will increase from 10% to 18% with the higher rate increasing from 20% to 24%.
• The Residential Property Rate of Capital Gains Tax will remain unchanged at 18/24%.
• The Rate of CGT for Business Asset Disposal Relief (“BADR”) will increase from 10% to 14% in April 2025 with a further increase to 18% in 2026/27.
• No change in the Lifetime limit for BADR, remaining at £1m.

Inheritance Tax (“IHT”)

• Agricultural Property and Business Property Relief will be reformed from April 2026 with the first £1m of combined business and agricultural assets continuing to attract no IHT. For assets over £1million, IHT will apply with a 50% relief, resulting in an effective rate of tax of 20%.
• Inherited Pension Pots will be subject to IHT from April 2027 onwards.

Stamp Duty Land Tax

• From tomorrow, the stamp duty surcharge on second homes will increase from 3% to 5%. 

Other relevant points

• No changes in rates of Corporation tax or Income Tax.
• No changes in rates of VAT.
• No changes in the current R&D regime.
• Business rates relief for the UK’s hospitality and retail sectors (at a rate of 40%).
• Increase the interest rate on unpaid tax debt to ensure people pay on time.
• Abolishment of the Non-Dom Tax regime from April 2025 with the introduction of a new residence-based scheme.
• No increase on fuel duty.
• State pension to increase by 4.1% from April 2025 onwards.
• An increase in the weekly earnings limit for those receiving Carer’s Allowance.

Our detailed, downloadable update below: