30th October 2024
In this article, we’ll break down the key takeaways for individuals and businesses from the Autumn Budget 2024.
Personal impact and taxes
- Income tax rates and thresholds remain unchanged
- Capital Gains Tax increases: lower rate increase from 10% to 18% and higher rate increase from 20% to 24% from 30 October 2024
- Business Asset Disposal Relief limit unchanged at £1m, but the rate of tax is increasing from 10% to 14% on 06 April 2025, and to 18% on 06 April 2026.
- Stamp Duty Land Tax, increase in surcharge for second-homes or home purchased by companies, by 2% to 5%, effect from 31 October.
- Inheritance Tax thresholds frozen at £325,000 for Nil Rate Band and £175,000 for Residence Nil Rate Band (where qualifying)
- Inheritance Tax reliefs see significant changes:
- Business Property Relief/ Agricultural Property Relief reform from April 2026 – the first £1m will attract 100% relief for IHT, but thereafter will only attract 50% relief (effective IHT charge of 20%)
- Pensions no longer exempt from IHT with effect from April 2027
- AIM investments will attract a 50% relief, rather than qualifying for BPR.
- State pension is projected to rise 4.1% in 2025-26 – that is an expected increase of £470
- Introduction of VAT on Private School fees
- Income tax and Employee National Insurance threshold freeze to end in 2028
- Abolish non-domicile tax regime; Fuel duty frozen for 2025/26; ISA and JISA allowances remain unchanged; Draught Duty cut 1p; Fuel Duty frozen
Business impact and taxes
- National minimum wage to rise by 6.7% from £11.44 an hour to £12.21 from April 2025 and for people aged between 18-20 year olds from £8.60 to £10.00. Apprentices and under 18s increase from £6.40 to £7.75
- Employers National Insurance contributions to rise to 15%, up from 13.8%. In addition, the threshold at which businesses start paying National Insurance on a workers’ earnings will be lowered from £9,100 to £5,000 from April 2025
- Employment Allowance, currently £5,000 will increase to £10,500 from April 2025
- Business rates discount – the current 75% discount to business rates for Retail, Hospitality and Leisure, due to expire in April 2025, will be replaced by a discount of 40% – up to a maximum discount of £110k per business.
- Business rates multipliers will be frozen for 2025/26
- Corporation tax rates and limits will remain unchanged, as will the Annual Investment Allowance at £1m, and Full Expensing.
- Double cab pick-up trucks will be treated as cars for capital allowances, Income Tax, and Benefit in Kind purposes with effect from April 2025. Transitional rules will apply for vehicles purchased, leased, or ordered before April 2025.
HMRC
- Increase HMRC compliance officers by 5,000 and debt management officers by 1,800 and digitalisation of HMRC systems to improve tax recoveries
- Increasing late payment interest by 1.5%pts
- Making Tax Digital for those with income over £20,000 is expected to be implemented this Parliament
Government spending and infrastructure
- Invest £5bn for house building, with £3.1bn on the Affordable Homes Programme.
- Increase for road maintenance next year, to deliver the commitment to fix an additional one million potholes each year.
- Increase of £22.6bn to the day-to-day health budget and a £3.1bn increase in the capital budget.
- The government will accelerate housebuilding with planning reforms
Please do not hesitate to contact us with any queries you may have.
Autumn Budget Guide