Autumn Budget 2024 - A Record Breaker!

Today marked the first budget presented by a female chancellor of the exchequer and the biggest tax raising budget since 1993, raising £40bn.

Here we summarise the key changes you need to know about:

National Living Wage

The rate will increase by 6.7% to £12.21 per hour, with the 18-20 year old rate also increasing to £10.00 per hour.

Both of these changes are from April 2025.

Employers National Insurance

The rate is increasing by 1.2% to 15% from April 2025.

The threshold at which employers start to pay contributions on an employees salary is to be reduced from £9,100 down to £5,000.

The employment allowance will be raised from £5,000 to £10,500 ( A company with one director being the only employee on the payroll is still not eligible for the employment allowance).

Capital Gains Tax

The lower rate of 10% is set to increase to 18%. 

The higher rate of 20% is to increase to 24%.

This increase aligns with the current higher rates on disposals of residential properties.

Business asset disposal relief

This is the relief that limits the tax rate on the disposal of your business to 10% provided it has been operating for at least 2 years and is a qualifying business.

The lifetime allowance of £1,000,000 remains in place.

The rate of tax on the first £1m of capital gain increases from 10% to 14% for disposals after 6 April 2025 and to 18% for disposals after 6 April 2026.

The rate of tax on capital gains tax on gains over £1m on business assets will be the normal rates above.

Inheritance tax

Inherited pension pots are currently exempt from Inheritance tax, however they will form part of an estate and be subject to Inheritance tax from April 2027.

Business property relief and agricultural property relief is reduced to 50% on the value of assets over £1m in an estate. This will take effect from April 2026.

Corporation Tax

The rate of Corporation tax rate will be capped at 25% 

Full expensing and £1m annual investment allowances will remain.

R&D rates remain unchanged.

These rates will remain for the duration of the parliament.

SDLT (Stamp Duty Land Tax)

The higher rate on the purchase of additional residential properties will increase from 2% to 5% from 31 October 2024.

VAT

There are no increases to the VAT Rates.

The widely publicised introduction of Vat on private school fees will go ahead from 1 January 2025.

No Changes

Income tax - No changes to the tax rates and thresholds, however the thresholds will be unfrozen from 2028/29 and then rise with inflation.

Employees and self employed National insurance.

Electric company car tax rates beyond 2028.

We will provide more detail on some of these key points shortly but if you want to discuss your own situation, get in touch.