On 30th October, Rachel Reeves made history as the UK’s first female Chancellor of the Exchequer, delivering her inaugural Autumn Budget speech—marking the first Labour budget in over 13 years. Several significant tax measures and policy changes were announced that could affect individuals, businesses, and investors alike.
We’ve distilled the key points for you below. For a more comprehensive breakdown, don’t miss our in-depth newsletter.
Key Highlights from the Autumn Budget 2024
1. Capital Gains Tax (CGT)
- Immediate Rate Increase: Basic rate taxpayers now face an 18% CGT rate on non-residential property gains (up from 10%). Gains outside the basic rate band are taxed at 24% (up from 20%).
- Business Asset Disposal Relief: CGT rates for qualifying business disposals will increase from 10% to 14% on 6 April 2025 and to 18% on 6 April 2026.
2. Stamp Duty Land Tax (SDLT)
- Higher Rates for Additional Properties: Effective immediately in England and Northern Ireland, SDLT rates are 2% higher for individuals buying additional residential properties, impacting landlords and property investors.
3. Income Tax and National Insurance Contributions (NICs)
- Frozen Rates: Income tax rates and thresholds are fixed until 5 April 2026.
- National Minimum Wage: From April 2025, the NMW will rise to £12.21 per hour for workers aged 21+, with increases for younger age brackets.
- Employers’ NICs: As of April 2025, employers’ NICs will increase to 15% (up from 13.8%), and the secondary threshold will drop from £9,100 to £5,000.
- Employers’ Allowance: Doubling to £10,500 in April 2025 (up from £5,000).
4. Corporation Tax (CT)
- Stable Rates: The main rate remains at 25%, with a 19% rate for small profits. Marginal relief continues for profits between these thresholds.
- First-Year Allowance: Zero-emission vehicles’ first-year allowance is extended until 31 March 2026.
5. VAT Changes
- Private School Fees: Starting January 2025, VAT at 20% will apply to private school fees.
- Threshold Stability: VAT registration and deregistration thresholds will stay at £90,000 and £88,000, respectively, from April 2025.
6. Inheritance Tax (IHT)
- Relief Adjustments: From April 2026, Agricultural and Business Property Reliefs will offer full relief only for the first £1 million of qualifying property. Values beyond this threshold will receive 50% relief.
- Undrawn Pensions in Estates: Starting April 2027, undrawn pension funds will be included in estate calculations for IHT purposes.
For full details on these announcements and how they may affect you, be sure to read our Ideal Schools Autumn Budget Review 2024.