Autumn Budget 2024

Autumn Budget 2024 - Key Tax Updates for Businesses and Individuals
31 October 2024

Chancellor Rachel Reeves delivered Labour's first budget in nearly 15 years on 30 October, introducing a range of tax-related changes. Here's an overview of the main points that may impact businesses and individuals:

National Insurance Contributions (NIC)

  • Employer NIC: Rate increase from 13.8% to 15%, and Secondary Threshold (the start point for Employer NIC) lowered from £9,100 to £5,000 annually, effective from 6 April 2025.

National Living Wage

  • Set to rise to £12.21 per hour, with adjustments for 18-20 year-olds to £10.00 and for under-18s and apprentices to £7.55, effective April 2025.

Capital Gains Tax (CGT)

  • Main Rates: Lower and higher rates increased to 18% and 24% (up from 10% and 20%), aligning with residential property gains, effective immediately.

  • Business Asset Disposal Relief/Investors' Relief: Rate increase to 14% from 6 April 2025 and to 18% from 6 April 2026, with the lifetime limit for Investors’ Relief reduced to £1M (down from £10M), effective immediately.

  • Lifetime Limit: The CGT lifetime limit remains at £1M for Business Asset Disposal Relief.

Inheritance Tax (IHT)

  • Reduction in Agricultural and Business Property Relief from 6 April 2026, with 100% relief on the first £1M and 50% on values exceeding that. AIM shares eligible for 50% relief.

  • Unused pension funds and death benefits will be subject to IHT from 6 April 2027.

  • Nil-rate bands (NRB and RNRB) frozen at £325,000 and £175,000, respectively, until 5 April 2030.

Stamp Duty Land Tax (SDLT)

  • Increase in the Higher Rates for Additional Dwellings (HRAD) surcharge from 3% to 5%, effective 31 October 2024.

Employment Allowance

  • Increased from £5,000 to £10,500 for all employers from 6 April 2025, with the £100,000 eligibility threshold removed.

Taxation for Non-UK Domiciled Individuals

  • Transition to a residence-based tax regime from 6 April 2025, replacing the remittance basis and providing a four-year tax exemption on foreign income and gains (FIG) for eligible individuals.

Interest on Late Tax Payments

  • HMRC's interest rate on unpaid tax liabilities will increase by 1.5% from 6 April 2025, up from the current 7.5%.

Capital Allowances

  • Extended 100% First Year Allowances (FYA) for zero-emission cars and electric vehicle charge points through 31 March/5 April 2026.

Other NIC Adjustments

  • Class 2 NIC rate to increase to £3.50 per week and Class 3 to £17.75 per week, from 6 April 2025.

Vehicle Benefits and Double Cab Pick-Ups

  • Van/van fuel benefit charges and car fuel benefit charges will see inflationary adjustments from April 2025, and double cab pick-ups will be treated as cars for specific tax purposes.

Corporation Tax

  • The main rate of Corporation Tax will remain at 25%.

VAT on Private School Fees

  • A confirmed 20% standard VAT rate on private school fees from 1 January 2025.

Making Tax Digital for Income Tax Self Assessment

  • Expanded to include individuals with annual incomes exceeding £20,000, with timing to be announced.

Budget 2024