WHAT YOU NEED TO KNOW ABOUT THE AUTUMN BUDGET 2024
The Autumn Budget 2024, also known as the “Halloween Budget,” was a biggie. This was a jam-packed budget with a lot to digest, especially for business owners.
Let’s take a minute to process that it was the first budget delivered by a female Chancellor. No matter how you feel about the budget measures, that’s something to celebrate!
We’re here to give you the rundown of what you need to know.
Things Individuals needs to know
No changes to Income tax rates or thresholds. These will be unfrozen from 2028 and will start rising with inflation again.
Capital Gains Tax rate increased right away. The Basic Rate increased from 10% to 18% and the Higher Rate increased from 20% to 24%. This will apply to shares and higher value assets other than residential property.
If you’re a parent, private school fees will be subject to VAT from January 2025.
Inherited pensions will be subject to inheritance tax from April 2027 which may increase the value of the inherited estate (this won’t affect married couples).
Inheritance Tax nil rate band (£325,000) and the residence nil-rate band (£175,000) have been frozen at their current levels until April 2030.
Things Business Owners need to know
The tax rate for Business Asset Disposal Relief will increase from 10% to 14% starting April 2025 and further increase to 18% will take effect from April 2026. This means when you sell your business, you will pay a higher rate of Capital Gains Tax on the profits from the sale. This makes tax planning even more important.
No changes to current Corporation Tax rates expected until the next general election.
Things Employers need to know
Minimum wage is increasing from April 2025:
21 and Over: £12.21 per hour (up from £11.44)
18-20 Year-Olds: £10.00 per hour (up from £8.60)
Under 18s & Apprentices: £7.55 per hour (up from £6.40)
If you hire entry level or minimum wage staff, then your staff payroll budgets may need reviewing.
Employers NIC rate will rise to 15% from 13.8%.
Employers’ NIC threshold has been lowered and NIC will now apply on salaries above £5,000 (previously £9,100) increasing the NIC bill for employers.
Employment Allowance has more than doubled from £5,000 to £10,500 which will benefit smaller employers.
Depending on your businesses’ circumstances, you may find that the increase in NI is offset (or even more than offset) by the rise in the Employment Allowance. If you are an single director only business, you may face paying more Employers NI.
Taxable non-cash benefits such as private medical insurance, company cars etc will bees and buy-to-let properties increased from 3% to 5% required to be reported monthly using payroll software, replacing P11Ds.
Things Property Owners need to know
Capital Gains Tax for residential property remains unchanged at 18% for basic rate and 24% for higher rate.
The Stamp Duty Land Tax surcharge on second homes and buy-to-let properties increased from 3% to 5% with immediate effect.
The threshold for 0% stamp duty relief for first time buyers will reduced to £300,000 from 31 March 2025 (currently £425,000). First time buyers purchasing a home over £500,000 will no longer benefit from any first time buyer’s relief (currently £625,000). After 31st March 2025, first time buyers must pay 5% of the property value over £300,000.
We know that these changes are a lot and may be unwelcome if you’re a small business owner. Some of the changes do not come into affect until April 2025 so there is time to understand the implications for your operations, prepare and make financial plans.
We’re talking to clients about how the Budget will affect their business and how to navigate any changes. If you’d like to be one of them, please book in a chat here.
IMPORTANT DISCLAIMER: The way in which tax charges (or tax relief, as appropriate) are applied depends upon individual circumstances and may be subject to change in the future. The information in this blog post is solely for information purposes and nothing in this post is intended to constitute advice or a recommendation. You should not make any investment decisions based upon its content. Pension Whilst considerable care has been taken to ensure that the information contained within this document is accurate and up-to-date, no guarantee is given as to the accuracy or completeness of any information.
