The UK Autumn Budget 2024, presented by Chancellor Rachel Reeves on 30 October, outlined key changes for individual taxpayers, businesses, and industries such as housing, education, and energy.
Please see below a summary of the primary updates.
Summary overview
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Income Tax
Rates for income tax, NI, and VAT remain unchanged, providing stability for individuals and small businesses.
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Corporate Tax
Corporate tax remains capped at 25%. The £1 million annual investment allowance continues, encouraging business investments. Employer NI rates will rise from 13.8% to 15% from April 2025, with an increased allowance for smaller businesses at £10,500.
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Capital Gains Tax (CGT)
New CGT rates will apply: 18% for basic rate taxpayers and 24% for higher rate taxpayers on the disposal of non-residential property. Residential CGT rates remain the same.
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Business Asset Disposal Relief (BADR)
BADR remains at 10% until 5 April 2025, increasing to 14% in 2025/26 tax year and 18% in 2026/27 tax year. These changes aim to encourage long-term investment in UK businesses.
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Inheritance Tax (IHT)
IHT thresholds will stay fixed at £325,000 until 2030, ensuring continuity in estate planning. However, starting on 6 April 2027, inherited pension pots will be subject to IHT.
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Agricultural & Business Property Relief
From 6 April 2026, 100% relief will apply to the first £1 million in agricultural and business assets, with a 50% relief rate thereafter.
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Residence-Based Regime for Non-Doms
From 6 April 2025, the taxation of non-UK domiciled individuals will be taxed based on residence rather than domicile status, simplifying the tax landscape and promoting UK investment.
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Stamp Duty Land Tax Surcharge
The surcharge on additional dwellings will increase from 3% to 5%, favouring first-time buyers and primary homeowners over investors in second homes for transactions completing on 31 October 2024 or later.
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Duties
Air Passenger Duty (APD) will rise incrementally, with economy fares experiencing modest increases and private jet APD up by 50%. Alcohol, tobacco, and soft drink duties will also rise, aligning with health and environmental goals.
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National Living Wage
The National Living Wage increases from £11.44 to £12.21 per hour from 1 April 2025, equating to an extra £1,400 annually for full-time workers. Minimum wage for 18 to 20-year-olds will rise to £10 per hour.
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Private School Fees
To support educational funding, 20% VAT on private school fees will begin on 1 January 2025, with additional removal of charitable rate relief on business rates for private schools in England from April 2025.
This summary highlights the major changes in the Autumn Budget 2024, which focus on balanced fiscal measures that support investment, small businesses, and workforce compensation, while raising revenue from select sectors.
For more information about these budget updates, speak with your local Nexia Advisor today. We are your personal finance partner with the resources and expertise to help you navigate complex financial challenges and achieve your goals.
